Correlation Between Shanghai Ziyan and Nanxing Furniture
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By analyzing existing cross correlation between Shanghai Ziyan Foods and Nanxing Furniture Machinery, you can compare the effects of market volatilities on Shanghai Ziyan 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 Shanghai Ziyan with a short position of Nanxing Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Ziyan and Nanxing Furniture.
Diversification Opportunities for Shanghai Ziyan and Nanxing Furniture
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shanghai and Nanxing is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Ziyan Foods and Nanxing Furniture Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanxing Furniture and Shanghai Ziyan 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 Shanghai Ziyan Foods 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 Shanghai Ziyan i.e., Shanghai Ziyan and Nanxing Furniture go up and down completely randomly.
Pair Corralation between Shanghai Ziyan and Nanxing Furniture
Assuming the 90 days trading horizon Shanghai Ziyan Foods is expected to under-perform the Nanxing Furniture. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Ziyan Foods is 1.34 times less risky than Nanxing Furniture. The stock trades about 0.0 of its potential returns per unit of risk. The Nanxing Furniture Machinery is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,465 in Nanxing Furniture Machinery on September 12, 2024 and sell it today you would earn a total of 203.00 from holding Nanxing Furniture Machinery or generate 13.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Ziyan Foods vs. Nanxing Furniture Machinery
Performance |
| Timeline |
| Shanghai Ziyan Foods |
| Nanxing Furniture |
Shanghai Ziyan and Nanxing Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Ziyan and Nanxing Furniture
The main advantage of trading using opposite Shanghai Ziyan and Nanxing Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Ziyan 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.| Shanghai Ziyan vs. Zhejiang Construction Investment | Shanghai Ziyan vs. Fujian Newland Computer | Shanghai Ziyan vs. Kuang Chi Technologies | Shanghai Ziyan vs. Jonjee Hi tech Industrial |
| Nanxing Furniture vs. Industrial and Commercial | Nanxing Furniture vs. Kweichow Moutai Co | Nanxing Furniture vs. Agricultural Bank of | Nanxing Furniture vs. China Mobile Limited |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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