Correlation Between China Petroleum and Nanxing Furniture
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By analyzing existing cross correlation between China Petroleum Chemical and Nanxing Furniture Machinery, you can compare the effects of market volatilities on China Petroleum 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 China Petroleum with a short position of Nanxing Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Petroleum and Nanxing Furniture.
Diversification Opportunities for China Petroleum and Nanxing Furniture
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Nanxing is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding China Petroleum 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 China Petroleum 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 China Petroleum 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 China Petroleum i.e., China Petroleum and Nanxing Furniture go up and down completely randomly.
Pair Corralation between China Petroleum and Nanxing Furniture
Assuming the 90 days trading horizon China Petroleum is expected to generate 6.28 times less return on investment than Nanxing Furniture. But when comparing it to its historical volatility, China Petroleum Chemical is 1.87 times less risky than Nanxing Furniture. It trades about 0.01 of its potential returns per unit of risk. Nanxing Furniture Machinery is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,423 in Nanxing Furniture Machinery on September 2, 2024 and sell it today you would earn a total of 96.00 from holding Nanxing Furniture Machinery or generate 6.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Petroleum Chemical vs. Nanxing Furniture Machinery
Performance |
| Timeline |
| China Petroleum Chemical |
| Nanxing Furniture |
China Petroleum and Nanxing Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Petroleum and Nanxing Furniture
The main advantage of trading using opposite China Petroleum and Nanxing Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Petroleum 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.| China Petroleum vs. Vohringer Home Technology | China Petroleum vs. Xinjiang Baodi Mining | China Petroleum vs. Xiamen Goldenhome Co | China Petroleum vs. Jinhui Mining Co |
| Nanxing Furniture vs. New China Life | Nanxing Furniture vs. Ming Yang Smart | Nanxing Furniture vs. 159681 | Nanxing Furniture vs. 159005 |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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