Correlation Between Shenwu Energy and Aofu Environmental
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By analyzing existing cross correlation between Shenwu Energy Saving and Aofu Environmental Technology, you can compare the effects of market volatilities on Shenwu Energy and Aofu Environmental 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 Shenwu Energy with a short position of Aofu Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenwu Energy and Aofu Environmental.
Diversification Opportunities for Shenwu Energy and Aofu Environmental
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenwu and Aofu is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Shenwu Energy Saving and Aofu Environmental Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aofu Environmental and Shenwu Energy 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 Shenwu Energy Saving are associated (or correlated) with Aofu Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aofu Environmental has no effect on the direction of Shenwu Energy i.e., Shenwu Energy and Aofu Environmental go up and down completely randomly.
Pair Corralation between Shenwu Energy and Aofu Environmental
Assuming the 90 days trading horizon Shenwu Energy Saving is expected to generate 2.44 times more return on investment than Aofu Environmental. However, Shenwu Energy is 2.44 times more volatile than Aofu Environmental Technology. It trades about 0.01 of its potential returns per unit of risk. Aofu Environmental Technology is currently generating about -0.13 per unit of risk. If you would invest 342.00 in Shenwu Energy Saving on October 28, 2024 and sell it today you would lose (9.00) from holding Shenwu Energy Saving or give up 2.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenwu Energy Saving vs. Aofu Environmental Technology
Performance |
| Timeline |
| Shenwu Energy Saving |
| Aofu Environmental |
Shenwu Energy and Aofu Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenwu Energy and Aofu Environmental
The main advantage of trading using opposite Shenwu Energy and Aofu Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenwu Energy position performs unexpectedly, Aofu Environmental 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 Aofu Environmental will offset losses from the drop in Aofu Environmental's long position.| Shenwu Energy vs. CareRay Digital Medical | Shenwu Energy vs. Emdoor Information Co | Shenwu Energy vs. Kontour Medical Technology | Shenwu Energy vs. Touchstone International Medical |
| Aofu Environmental vs. Gifore Agricultural Machinery | Aofu Environmental vs. Lutian Machinery Co | Aofu Environmental vs. Zhongshan Broad Ocean Motor | Aofu Environmental vs. Huasi Agricultural Development |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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