Correlation Between Nanxing Furniture and Zhejiang Kingland
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By analyzing existing cross correlation between Nanxing Furniture Machinery and Zhejiang Kingland Pipeline, you can compare the effects of market volatilities on Nanxing Furniture and Zhejiang Kingland 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 Nanxing Furniture with a short position of Zhejiang Kingland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanxing Furniture and Zhejiang Kingland.
Diversification Opportunities for Nanxing Furniture and Zhejiang Kingland
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nanxing and Zhejiang is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Nanxing Furniture Machinery and Zhejiang Kingland Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Kingland and Nanxing Furniture 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 Nanxing Furniture Machinery are associated (or correlated) with Zhejiang Kingland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Kingland has no effect on the direction of Nanxing Furniture i.e., Nanxing Furniture and Zhejiang Kingland go up and down completely randomly.
Pair Corralation between Nanxing Furniture and Zhejiang Kingland
Assuming the 90 days trading horizon Nanxing Furniture Machinery is expected to under-perform the Zhejiang Kingland. In addition to that, Nanxing Furniture is 2.17 times more volatile than Zhejiang Kingland Pipeline. It trades about -0.04 of its total potential returns per unit of risk. Zhejiang Kingland Pipeline is currently generating about -0.08 per unit of volatility. If you would invest 620.00 in Zhejiang Kingland Pipeline on September 25, 2024 and sell it today you would lose (18.00) from holding Zhejiang Kingland Pipeline or give up 2.9% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Nanxing Furniture Machinery vs. Zhejiang Kingland Pipeline
Performance |
Timeline |
Nanxing Furniture |
Zhejiang Kingland |
Nanxing Furniture and Zhejiang Kingland Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nanxing Furniture and Zhejiang Kingland
The main advantage of trading using opposite Nanxing Furniture and Zhejiang Kingland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanxing Furniture position performs unexpectedly, Zhejiang Kingland 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 Zhejiang Kingland will offset losses from the drop in Zhejiang Kingland's long position.Nanxing Furniture vs. Bank of China | Nanxing Furniture vs. Kweichow Moutai Co | Nanxing Furniture vs. PetroChina Co Ltd | Nanxing Furniture vs. Bank of Communications |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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