Correlation Between Nanxing Furniture and Yantai North
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By analyzing existing cross correlation between Nanxing Furniture Machinery and Yantai North Andre, you can compare the effects of market volatilities on Nanxing Furniture and Yantai North 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 Yantai North. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanxing Furniture and Yantai North.
Diversification Opportunities for Nanxing Furniture and Yantai North
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nanxing and Yantai is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Nanxing Furniture Machinery and Yantai North Andre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yantai North Andre 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 Yantai North. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yantai North Andre has no effect on the direction of Nanxing Furniture i.e., Nanxing Furniture and Yantai North go up and down completely randomly.
Pair Corralation between Nanxing Furniture and Yantai North
Assuming the 90 days trading horizon Nanxing Furniture is expected to generate 1.19 times less return on investment than Yantai North. In addition to that, Nanxing Furniture is 1.98 times more volatile than Yantai North Andre. It trades about 0.13 of its total potential returns per unit of risk. Yantai North Andre is currently generating about 0.3 per unit of volatility. If you would invest 2,417 in Yantai North Andre on September 1, 2024 and sell it today you would earn a total of 475.00 from holding Yantai North Andre or generate 19.65% 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. Yantai North Andre
Performance |
| Timeline |
| Nanxing Furniture |
| Yantai North Andre |
Nanxing Furniture and Yantai North Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanxing Furniture and Yantai North
The main advantage of trading using opposite Nanxing Furniture and Yantai North positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanxing Furniture position performs unexpectedly, Yantai North 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 Yantai North will offset losses from the drop in Yantai North's long position.| Nanxing Furniture vs. New China Life | Nanxing Furniture vs. Ming Yang Smart | Nanxing Furniture vs. 159681 | Nanxing Furniture vs. 159005 |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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