Correlation Between Nanxing Furniture and Dongxing Sec
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By analyzing existing cross correlation between Nanxing Furniture Machinery and Dongxing Sec Co, you can compare the effects of market volatilities on Nanxing Furniture and Dongxing Sec 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 Dongxing Sec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanxing Furniture and Dongxing Sec.
Diversification Opportunities for Nanxing Furniture and Dongxing Sec
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nanxing and Dongxing is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Nanxing Furniture Machinery and Dongxing Sec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongxing Sec 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 Dongxing Sec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongxing Sec has no effect on the direction of Nanxing Furniture i.e., Nanxing Furniture and Dongxing Sec go up and down completely randomly.
Pair Corralation between Nanxing Furniture and Dongxing Sec
Assuming the 90 days trading horizon Nanxing Furniture Machinery is expected to under-perform the Dongxing Sec. In addition to that, Nanxing Furniture is 1.96 times more volatile than Dongxing Sec Co. It trades about -0.02 of its total potential returns per unit of risk. Dongxing Sec Co is currently generating about 0.12 per unit of volatility. If you would invest 1,098 in Dongxing Sec Co on September 26, 2024 and sell it today you would earn a total of 46.00 from holding Dongxing Sec Co or generate 4.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Nanxing Furniture Machinery vs. Dongxing Sec Co
Performance |
Timeline |
Nanxing Furniture |
Dongxing Sec |
Nanxing Furniture and Dongxing Sec Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nanxing Furniture and Dongxing Sec
The main advantage of trading using opposite Nanxing Furniture and Dongxing Sec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanxing Furniture position performs unexpectedly, Dongxing Sec 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 Dongxing Sec will offset losses from the drop in Dongxing Sec'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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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