Correlation Between Gan Yuan and Nanxing Furniture
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By analyzing existing cross correlation between Gan Yuan Foods and Nanxing Furniture Machinery, you can compare the effects of market volatilities on Gan Yuan 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 Gan Yuan with a short position of Nanxing Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gan Yuan and Nanxing Furniture.
Diversification Opportunities for Gan Yuan and Nanxing Furniture
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gan and Nanxing is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Gan Yuan Foods and Nanxing Furniture Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanxing Furniture and Gan Yuan 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 Gan Yuan Foods 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 Gan Yuan i.e., Gan Yuan and Nanxing Furniture go up and down completely randomly.
Pair Corralation between Gan Yuan and Nanxing Furniture
Assuming the 90 days trading horizon Gan Yuan Foods is expected to generate 0.84 times more return on investment than Nanxing Furniture. However, Gan Yuan Foods is 1.19 times less risky than Nanxing Furniture. It trades about 0.05 of its potential returns per unit of risk. Nanxing Furniture Machinery is currently generating about 0.03 per unit of risk. If you would invest 6,687 in Gan Yuan Foods on September 12, 2024 and sell it today you would earn a total of 1,506 from holding Gan Yuan Foods or generate 22.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gan Yuan Foods vs. Nanxing Furniture Machinery
Performance |
| Timeline |
| Gan Yuan Foods |
| Nanxing Furniture |
Gan Yuan and Nanxing Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gan Yuan and Nanxing Furniture
The main advantage of trading using opposite Gan Yuan and Nanxing Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gan Yuan 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.| Gan Yuan vs. Maxvision Technology Corp | Gan Yuan vs. Eastroc Beverage Group | Gan Yuan vs. Changchun Faway Automobile | Gan Yuan vs. ROPEOK Technology Group |
| Nanxing Furniture vs. Agricultural Bank of | Nanxing Furniture vs. Industrial and Commercial | Nanxing Furniture vs. Bank of China | Nanxing Furniture 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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