Correlation Between Guizhou Chanhen and Nanxing Furniture
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By analyzing existing cross correlation between Guizhou Chanhen Chemical and Nanxing Furniture Machinery, you can compare the effects of market volatilities on Guizhou Chanhen and Nanxing Furniture 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 Guizhou Chanhen with a short position of Nanxing Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guizhou Chanhen and Nanxing Furniture.
Diversification Opportunities for Guizhou Chanhen and Nanxing Furniture
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Guizhou and Nanxing is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Guizhou Chanhen Chemical and Nanxing Furniture Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanxing Furniture and Guizhou Chanhen 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 Guizhou Chanhen Chemical are associated (or correlated) with Nanxing Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanxing Furniture has no effect on the direction of Guizhou Chanhen i.e., Guizhou Chanhen and Nanxing Furniture go up and down completely randomly.
Pair Corralation between Guizhou Chanhen and Nanxing Furniture
Assuming the 90 days trading horizon Guizhou Chanhen Chemical is expected to under-perform the Nanxing Furniture. But the stock apears to be less risky and, when comparing its historical volatility, Guizhou Chanhen Chemical is 2.54 times less risky than Nanxing Furniture. The stock trades about -0.23 of its potential returns per unit of risk. The Nanxing Furniture Machinery is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,558 in Nanxing Furniture Machinery on October 28, 2024 and sell it today you would earn a total of 137.00 from holding Nanxing Furniture Machinery or generate 8.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guizhou Chanhen Chemical vs. Nanxing Furniture Machinery
Performance |
| Timeline |
| Guizhou Chanhen Chemical |
| Nanxing Furniture |
Guizhou Chanhen and Nanxing Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guizhou Chanhen and Nanxing Furniture
The main advantage of trading using opposite Guizhou Chanhen and Nanxing Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guizhou Chanhen position performs unexpectedly, Nanxing Furniture 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 Nanxing Furniture will offset losses from the drop in Nanxing Furniture's long position.| Guizhou Chanhen vs. Jilin Jlu Communication | Guizhou Chanhen vs. Strait Innovation Internet | Guizhou Chanhen vs. Jinhe Biotechnology Co | Guizhou Chanhen vs. Shenzhen Bioeasy Biotechnology |
| Nanxing Furniture vs. Peoples Insurance of | Nanxing Furniture vs. Will Semiconductor Co | Nanxing Furniture vs. Porton Fine Chemicals | Nanxing Furniture vs. Miracll Chemicals Co |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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