Correlation Between Nanxing Furniture and IRay Technology
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By analyzing existing cross correlation between Nanxing Furniture Machinery and iRay Technology Co, you can compare the effects of market volatilities on Nanxing Furniture and IRay Technology 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 IRay Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanxing Furniture and IRay Technology.
Diversification Opportunities for Nanxing Furniture and IRay Technology
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nanxing and IRay is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Nanxing Furniture Machinery and iRay Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iRay Technology 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 IRay Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iRay Technology has no effect on the direction of Nanxing Furniture i.e., Nanxing Furniture and IRay Technology go up and down completely randomly.
Pair Corralation between Nanxing Furniture and IRay Technology
Assuming the 90 days trading horizon Nanxing Furniture Machinery is expected to generate 0.84 times more return on investment than IRay Technology. However, Nanxing Furniture Machinery is 1.19 times less risky than IRay Technology. It trades about 0.04 of its potential returns per unit of risk. iRay Technology Co is currently generating about -0.02 per unit of risk. If you would invest 1,289 in Nanxing Furniture Machinery on September 12, 2024 and sell it today you would earn a total of 405.00 from holding Nanxing Furniture Machinery or generate 31.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.68% |
| Values | Daily Returns |
Nanxing Furniture Machinery vs. iRay Technology Co
Performance |
| Timeline |
| Nanxing Furniture |
| iRay Technology |
Nanxing Furniture and IRay Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanxing Furniture and IRay Technology
The main advantage of trading using opposite Nanxing Furniture and IRay Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanxing Furniture position performs unexpectedly, IRay Technology 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 IRay Technology will offset losses from the drop in IRay Technology'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 |
| IRay Technology vs. BTG Hotels Group | IRay Technology vs. Huatian Hotel Group | IRay Technology vs. Nanxing Furniture Machinery | IRay Technology vs. Huaxia Fund Management |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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