Correlation Between Nanxing Furniture and Cambricon Technologies
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By analyzing existing cross correlation between Nanxing Furniture Machinery and Cambricon Technologies Corp, you can compare the effects of market volatilities on Nanxing Furniture and Cambricon Technologies 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 Cambricon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanxing Furniture and Cambricon Technologies.
Diversification Opportunities for Nanxing Furniture and Cambricon Technologies
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nanxing and Cambricon is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Nanxing Furniture Machinery and Cambricon Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambricon Technologies 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 Cambricon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambricon Technologies has no effect on the direction of Nanxing Furniture i.e., Nanxing Furniture and Cambricon Technologies go up and down completely randomly.
Pair Corralation between Nanxing Furniture and Cambricon Technologies
Assuming the 90 days trading horizon Nanxing Furniture is expected to generate 7.78 times less return on investment than Cambricon Technologies. But when comparing it to its historical volatility, Nanxing Furniture Machinery is 1.22 times less risky than Cambricon Technologies. It trades about 0.03 of its potential returns per unit of risk. Cambricon Technologies Corp is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 34,699 in Cambricon Technologies Corp on October 5, 2024 and sell it today you would earn a total of 29,863 from holding Cambricon Technologies Corp or generate 86.06% 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. Cambricon Technologies Corp
Performance |
Timeline |
Nanxing Furniture |
Cambricon Technologies |
Nanxing Furniture and Cambricon Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nanxing Furniture and Cambricon Technologies
The main advantage of trading using opposite Nanxing Furniture and Cambricon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanxing Furniture position performs unexpectedly, Cambricon Technologies 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 Cambricon Technologies will offset losses from the drop in Cambricon Technologies' long position.Nanxing Furniture vs. Industrial and Commercial | Nanxing Furniture vs. China Construction Bank | Nanxing Furniture vs. Agricultural Bank of | Nanxing Furniture vs. Bank of China |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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