Correlation Between China Construction and Nanxing Furniture
Specify exactly 2 symbols:
By analyzing existing cross correlation between China Construction Bank and Nanxing Furniture Machinery, you can compare the effects of market volatilities on China Construction 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 Construction with a short position of Nanxing Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Nanxing Furniture.
Diversification Opportunities for China Construction and Nanxing Furniture
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and Nanxing is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank 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 Construction 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 Construction Bank 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 Construction i.e., China Construction and Nanxing Furniture go up and down completely randomly.
Pair Corralation between China Construction and Nanxing Furniture
Assuming the 90 days trading horizon China Construction Bank is expected to generate 0.34 times more return on investment than Nanxing Furniture. However, China Construction Bank is 2.92 times less risky than Nanxing Furniture. It trades about 0.13 of its potential returns per unit of risk. Nanxing Furniture Machinery is currently generating about 0.0 per unit of risk. If you would invest 788.00 in China Construction Bank on October 26, 2024 and sell it today you would earn a total of 56.00 from holding China Construction Bank or generate 7.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. Nanxing Furniture Machinery
Performance |
| Timeline |
| China Construction Bank |
| Nanxing Furniture |
China Construction and Nanxing Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Nanxing Furniture
The main advantage of trading using opposite China Construction and Nanxing Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction 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.The idea behind China Construction Bank and Nanxing Furniture Machinery pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Nanxing Furniture vs. PetroChina Co Ltd | Nanxing Furniture vs. Industrial and Commercial | Nanxing Furniture vs. China Petroleum Chemical | Nanxing Furniture vs. China Construction Bank |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |