Correlation Between Nanxing Furniture and Xingguang Agricultural
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By analyzing existing cross correlation between Nanxing Furniture Machinery and Xingguang Agricultural Mach, you can compare the effects of market volatilities on Nanxing Furniture and Xingguang Agricultural 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 Xingguang Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanxing Furniture and Xingguang Agricultural.
Diversification Opportunities for Nanxing Furniture and Xingguang Agricultural
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nanxing and Xingguang is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Nanxing Furniture Machinery and Xingguang Agricultural Mach in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xingguang Agricultural 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 Xingguang Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xingguang Agricultural has no effect on the direction of Nanxing Furniture i.e., Nanxing Furniture and Xingguang Agricultural go up and down completely randomly.
Pair Corralation between Nanxing Furniture and Xingguang Agricultural
Assuming the 90 days trading horizon Nanxing Furniture Machinery is expected to generate 0.76 times more return on investment than Xingguang Agricultural. However, Nanxing Furniture Machinery is 1.32 times less risky than Xingguang Agricultural. It trades about 0.03 of its potential returns per unit of risk. Xingguang Agricultural Mach is currently generating about 0.01 per unit of risk. If you would invest 1,465 in Nanxing Furniture Machinery on September 12, 2024 and sell it today you would earn a total of 203.00 from holding Nanxing Furniture Machinery or generate 13.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanxing Furniture Machinery vs. Xingguang Agricultural Mach
Performance |
| Timeline |
| Nanxing Furniture |
| Xingguang Agricultural |
Nanxing Furniture and Xingguang Agricultural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanxing Furniture and Xingguang Agricultural
The main advantage of trading using opposite Nanxing Furniture and Xingguang Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanxing Furniture position performs unexpectedly, Xingguang Agricultural 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 Xingguang Agricultural will offset losses from the drop in Xingguang Agricultural's long position.| Nanxing Furniture vs. Agricultural Bank of | Nanxing Furniture vs. Industrial and Commercial | Nanxing Furniture vs. Bank of China | Nanxing Furniture vs. PetroChina Co Ltd |
| Xingguang Agricultural vs. Agricultural Bank of | Xingguang Agricultural vs. Industrial and Commercial | Xingguang Agricultural vs. Bank of China | Xingguang Agricultural vs. PetroChina Co Ltd |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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