Correlation Between Nanxing Furniture and Qijing Machinery
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By analyzing existing cross correlation between Nanxing Furniture Machinery and Qijing Machinery, you can compare the effects of market volatilities on Nanxing Furniture and Qijing Machinery and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Nanxing Furniture with a short position of Qijing Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanxing Furniture and Qijing Machinery.
Diversification Opportunities for Nanxing Furniture and Qijing Machinery
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nanxing and Qijing is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Nanxing Furniture Machinery and Qijing Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qijing Machinery and Nanxing Furniture is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Nanxing Furniture Machinery are associated (or correlated) with Qijing Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qijing Machinery has no effect on the direction of Nanxing Furniture i.e., Nanxing Furniture and Qijing Machinery go up and down completely randomly.
Pair Corralation between Nanxing Furniture and Qijing Machinery
Assuming the 90 days trading horizon Nanxing Furniture is expected to generate 1.12 times less return on investment than Qijing Machinery. In addition to that, Nanxing Furniture is 1.41 times more volatile than Qijing Machinery. It trades about 0.1 of its total potential returns per unit of risk. Qijing Machinery is currently generating about 0.16 per unit of volatility. If you would invest 1,257 in Qijing Machinery on October 27, 2024 and sell it today you would earn a total of 134.00 from holding Qijing Machinery or generate 10.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanxing Furniture Machinery vs. Qijing Machinery
Performance |
| Timeline |
| Nanxing Furniture |
| Qijing Machinery |
Nanxing Furniture and Qijing Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanxing Furniture and Qijing Machinery
The main advantage of trading using opposite Nanxing Furniture and Qijing Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanxing Furniture position performs unexpectedly, Qijing Machinery can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Qijing Machinery will offset losses from the drop in Qijing Machinery's long position.| Nanxing Furniture vs. Xinxiang Chemical Fiber | Nanxing Furniture vs. Xilong Chemical Co | Nanxing Furniture vs. Hengli Industrial Development | Nanxing Furniture vs. Guizhou Chanhen Chemical |
| Qijing Machinery vs. Chengdu Kanghua Biological | Qijing Machinery vs. Suzhou Novoprotein Scientific | Qijing Machinery vs. Aluminum Corp of | Qijing Machinery vs. COL Digital Publishing |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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