Correlation Between Do Fluoride and Aofu Environmental
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By analyzing existing cross correlation between Do Fluoride Chemicals Co and Aofu Environmental Technology, you can compare the effects of market volatilities on Do Fluoride 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 Do Fluoride with a short position of Aofu Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Do Fluoride and Aofu Environmental.
Diversification Opportunities for Do Fluoride and Aofu Environmental
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between 002407 and Aofu is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Do Fluoride Chemicals Co and Aofu Environmental Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aofu Environmental and Do Fluoride 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 Do Fluoride Chemicals Co 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 Do Fluoride i.e., Do Fluoride and Aofu Environmental go up and down completely randomly.
Pair Corralation between Do Fluoride and Aofu Environmental
Assuming the 90 days trading horizon Do Fluoride is expected to generate 2.05 times less return on investment than Aofu Environmental. But when comparing it to its historical volatility, Do Fluoride Chemicals Co is 1.08 times less risky than Aofu Environmental. It trades about 0.03 of its potential returns per unit of risk. Aofu Environmental Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 920.00 in Aofu Environmental Technology on September 26, 2024 and sell it today you would earn a total of 122.00 from holding Aofu Environmental Technology or generate 13.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Do Fluoride Chemicals Co vs. Aofu Environmental Technology
Performance |
| Timeline |
| Do Fluoride Chemicals |
| Aofu Environmental |
Do Fluoride and Aofu Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Do Fluoride and Aofu Environmental
The main advantage of trading using opposite Do Fluoride and Aofu Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Do Fluoride 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.| Do Fluoride vs. Zijin Mining Group | Do Fluoride vs. Wanhua Chemical Group | Do Fluoride vs. Baoshan Iron Steel | Do Fluoride vs. Shandong Gold Mining |
| Aofu Environmental vs. Hunan TV Broadcast | Aofu Environmental vs. Ningxia Xiaoming Agriculture | Aofu Environmental vs. Anhui Transport Consulting | Aofu Environmental vs. Chengdu Xinzhu RoadBridge |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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