Correlation Between Xingguang Agricultural and Nanxing Furniture
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By analyzing existing cross correlation between Xingguang Agricultural Mach and Nanxing Furniture Machinery, you can compare the effects of market volatilities on Xingguang Agricultural 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 Xingguang Agricultural with a short position of Nanxing Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xingguang Agricultural and Nanxing Furniture.
Diversification Opportunities for Xingguang Agricultural and Nanxing Furniture
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xingguang and Nanxing is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Xingguang Agricultural Mach and Nanxing Furniture Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanxing Furniture and Xingguang Agricultural 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 Xingguang Agricultural Mach 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 Xingguang Agricultural i.e., Xingguang Agricultural and Nanxing Furniture go up and down completely randomly.
Pair Corralation between Xingguang Agricultural and Nanxing Furniture
Assuming the 90 days trading horizon Xingguang Agricultural is expected to generate 1.71 times less return on investment than Nanxing Furniture. In addition to that, Xingguang Agricultural is 1.32 times more volatile than Nanxing Furniture Machinery. It trades about 0.01 of its total potential returns per unit of risk. Nanxing Furniture Machinery is currently generating about 0.03 per unit of volatility. 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xingguang Agricultural Mach vs. Nanxing Furniture Machinery
Performance |
| Timeline |
| Xingguang Agricultural |
| Nanxing Furniture |
Xingguang Agricultural and Nanxing Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xingguang Agricultural and Nanxing Furniture
The main advantage of trading using opposite Xingguang Agricultural and Nanxing Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xingguang Agricultural 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.| Xingguang Agricultural vs. Agricultural Bank of | Xingguang Agricultural vs. Industrial and Commercial | Xingguang Agricultural vs. Bank of China | Xingguang Agricultural vs. PetroChina Co Ltd |
| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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