Correlation Between BTG Hotels and Nanxing Furniture
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By analyzing existing cross correlation between BTG Hotels Group and Nanxing Furniture Machinery, you can compare the effects of market volatilities on BTG Hotels 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 BTG Hotels with a short position of Nanxing Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTG Hotels and Nanxing Furniture.
Diversification Opportunities for BTG Hotels and Nanxing Furniture
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BTG and Nanxing is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding BTG Hotels Group and Nanxing Furniture Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanxing Furniture and BTG Hotels 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 BTG Hotels Group 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 BTG Hotels i.e., BTG Hotels and Nanxing Furniture go up and down completely randomly.
Pair Corralation between BTG Hotels and Nanxing Furniture
Assuming the 90 days trading horizon BTG Hotels Group is expected to under-perform the Nanxing Furniture. But the stock apears to be less risky and, when comparing its historical volatility, BTG Hotels Group is 2.14 times less risky than Nanxing Furniture. The stock trades about -0.62 of its potential returns per unit of risk. The Nanxing Furniture Machinery is currently generating about -0.2 of returns per unit of risk over similar time horizon. If you would invest 1,640 in Nanxing Furniture Machinery on October 14, 2024 and sell it today you would lose (227.00) from holding Nanxing Furniture Machinery or give up 13.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTG Hotels Group vs. Nanxing Furniture Machinery
Performance |
| Timeline |
| BTG Hotels Group |
| Nanxing Furniture |
BTG Hotels and Nanxing Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTG Hotels and Nanxing Furniture
The main advantage of trading using opposite BTG Hotels and Nanxing Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTG Hotels 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.| BTG Hotels vs. Guangdong Silvere Sci | BTG Hotels vs. Sportsoul Co Ltd | BTG Hotels vs. Tianjin Silvery Dragon | BTG Hotels vs. Hubeiyichang Transportation Group |
| Nanxing Furniture vs. Changjiang Publishing Media | Nanxing Furniture vs. Xinhua Winshare Publishing | Nanxing Furniture vs. Beijing Kaiwen Education | Nanxing Furniture vs. BTG Hotels Group |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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