Correlation Between Agricultural Bank and Nanxing Furniture
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By analyzing existing cross correlation between Agricultural Bank of and Nanxing Furniture Machinery, you can compare the effects of market volatilities on Agricultural Bank 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 Agricultural Bank with a short position of Nanxing Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agricultural Bank and Nanxing Furniture.
Diversification Opportunities for Agricultural Bank and Nanxing Furniture
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Agricultural and Nanxing is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Agricultural Bank of and Nanxing Furniture Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanxing Furniture and Agricultural Bank 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 Agricultural Bank of 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 Agricultural Bank i.e., Agricultural Bank and Nanxing Furniture go up and down completely randomly.
Pair Corralation between Agricultural Bank and Nanxing Furniture
Assuming the 90 days trading horizon Agricultural Bank is expected to generate 1.01 times less return on investment than Nanxing Furniture. But when comparing it to its historical volatility, Agricultural Bank of is 2.4 times less risky than Nanxing Furniture. It trades about 0.1 of its potential returns per unit of risk. Nanxing Furniture Machinery is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,289 in Nanxing Furniture Machinery on September 12, 2024 and sell it today you would earn a total of 405.00 from holding Nanxing Furniture Machinery or generate 31.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agricultural Bank of vs. Nanxing Furniture Machinery
Performance |
| Timeline |
| Agricultural Bank |
| Nanxing Furniture |
Agricultural Bank and Nanxing Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agricultural Bank and Nanxing Furniture
The main advantage of trading using opposite Agricultural Bank and Nanxing Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agricultural Bank 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.| Agricultural Bank vs. China Petroleum Chemical | Agricultural Bank vs. PetroChina Co Ltd | Agricultural Bank vs. China Mobile Limited | Agricultural Bank vs. Industrial and Commercial |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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