Correlation Between Industrial and Nanxing Furniture
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By analyzing existing cross correlation between Industrial and Commercial and Nanxing Furniture Machinery, you can compare the effects of market volatilities on Industrial 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 Industrial with a short position of Nanxing Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and Nanxing Furniture.
Diversification Opportunities for Industrial and Nanxing Furniture
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Industrial and Nanxing is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial and Nanxing Furniture Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanxing Furniture and Industrial 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 Industrial and Commercial 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 Industrial i.e., Industrial and Nanxing Furniture go up and down completely randomly.
Pair Corralation between Industrial and Nanxing Furniture
Assuming the 90 days trading horizon Industrial is expected to generate 1.34 times less return on investment than Nanxing Furniture. But when comparing it to its historical volatility, Industrial and Commercial is 2.63 times less risky than Nanxing Furniture. It trades about 0.08 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 1,043 in Nanxing Furniture Machinery on August 30, 2024 and sell it today you would earn a total of 516.00 from holding Nanxing Furniture Machinery or generate 49.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial and Commercial vs. Nanxing Furniture Machinery
Performance |
| Timeline |
| Industrial and Commercial |
| Nanxing Furniture |
Industrial and Nanxing Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial and Nanxing Furniture
The main advantage of trading using opposite Industrial and Nanxing Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial 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.| Industrial vs. Sinofibers Technology Co | Industrial vs. Saurer Intelligent Technology | Industrial vs. Sinocelltech Group | Industrial vs. Dhc Software Co |
| Nanxing Furniture vs. PetroChina Co Ltd | Nanxing Furniture vs. China State Construction | Nanxing Furniture vs. China Mobile Limited | Nanxing Furniture vs. Industrial and Commercial |
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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