Correlation Between Hunan Fangsheng and Nanxing Furniture
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By analyzing existing cross correlation between Hunan Fangsheng Pharm and Nanxing Furniture Machinery, you can compare the effects of market volatilities on Hunan Fangsheng 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 Hunan Fangsheng with a short position of Nanxing Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan Fangsheng and Nanxing Furniture.
Diversification Opportunities for Hunan Fangsheng and Nanxing Furniture
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hunan and Nanxing is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Hunan Fangsheng Pharm and Nanxing Furniture Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanxing Furniture and Hunan Fangsheng 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 Hunan Fangsheng Pharm 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 Hunan Fangsheng i.e., Hunan Fangsheng and Nanxing Furniture go up and down completely randomly.
Pair Corralation between Hunan Fangsheng and Nanxing Furniture
Assuming the 90 days trading horizon Hunan Fangsheng Pharm is expected to under-perform the Nanxing Furniture. But the stock apears to be less risky and, when comparing its historical volatility, Hunan Fangsheng Pharm is 1.65 times less risky than Nanxing Furniture. The stock trades about -0.18 of its potential returns per unit of risk. The Nanxing Furniture Machinery is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 1,525 in Nanxing Furniture Machinery on October 23, 2024 and sell it today you would lose (144.00) from holding Nanxing Furniture Machinery or give up 9.44% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Hunan Fangsheng Pharm vs. Nanxing Furniture Machinery
Performance |
Timeline |
Hunan Fangsheng Pharm |
Nanxing Furniture |
Hunan Fangsheng and Nanxing Furniture Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hunan Fangsheng and Nanxing Furniture
The main advantage of trading using opposite Hunan Fangsheng and Nanxing Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan Fangsheng 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.Hunan Fangsheng vs. Shanghai Shuixing Home | Hunan Fangsheng vs. Oppein Home Group | Hunan Fangsheng vs. Easyhome New Retail | Hunan Fangsheng vs. Nanjing OLO Home |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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