Correlation Between Porton Fine and Nanxing Furniture
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By analyzing existing cross correlation between Porton Fine Chemicals and Nanxing Furniture Machinery, you can compare the effects of market volatilities on Porton Fine 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 Porton Fine with a short position of Nanxing Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Porton Fine and Nanxing Furniture.
Diversification Opportunities for Porton Fine and Nanxing Furniture
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Porton and Nanxing is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Porton Fine Chemicals and Nanxing Furniture Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanxing Furniture and Porton Fine 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 Porton Fine Chemicals 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 Porton Fine i.e., Porton Fine and Nanxing Furniture go up and down completely randomly.
Pair Corralation between Porton Fine and Nanxing Furniture
Assuming the 90 days trading horizon Porton Fine is expected to generate 15.12 times less return on investment than Nanxing Furniture. But when comparing it to its historical volatility, Porton Fine Chemicals is 3.06 times less risky than Nanxing Furniture. It trades about 0.06 of its potential returns per unit of risk. Nanxing Furniture Machinery is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 1,385 in Nanxing Furniture Machinery on November 6, 2024 and sell it today you would earn a total of 364.00 from holding Nanxing Furniture Machinery or generate 26.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Porton Fine Chemicals vs. Nanxing Furniture Machinery
Performance |
| Timeline |
| Porton Fine Chemicals |
| Nanxing Furniture |
Porton Fine and Nanxing Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Porton Fine and Nanxing Furniture
The main advantage of trading using opposite Porton Fine and Nanxing Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Porton Fine 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.| Porton Fine vs. Heren Health Co | Porton Fine vs. Yunnan Jianzhijia Health Chain | Porton Fine vs. Shandong Sinoglory Health | Porton Fine vs. Anhui Huaren Health |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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