Correlation Between Fujian Longzhou and Aofu Environmental
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By analyzing existing cross correlation between Fujian Longzhou Transportation and Aofu Environmental Technology, you can compare the effects of market volatilities on Fujian Longzhou 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 Fujian Longzhou with a short position of Aofu Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Longzhou and Aofu Environmental.
Diversification Opportunities for Fujian Longzhou and Aofu Environmental
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fujian and Aofu is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Longzhou Transportation and Aofu Environmental Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aofu Environmental and Fujian Longzhou 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 Fujian Longzhou Transportation 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 Fujian Longzhou i.e., Fujian Longzhou and Aofu Environmental go up and down completely randomly.
Pair Corralation between Fujian Longzhou and Aofu Environmental
Assuming the 90 days trading horizon Fujian Longzhou Transportation is expected to generate 1.83 times more return on investment than Aofu Environmental. However, Fujian Longzhou is 1.83 times more volatile than Aofu Environmental Technology. It trades about 0.17 of its potential returns per unit of risk. Aofu Environmental Technology is currently generating about 0.01 per unit of risk. If you would invest 495.00 in Fujian Longzhou Transportation on September 13, 2024 and sell it today you would earn a total of 73.00 from holding Fujian Longzhou Transportation or generate 14.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Longzhou Transportation vs. Aofu Environmental Technology
Performance |
| Timeline |
| Fujian Longzhou Tran |
| Aofu Environmental |
Fujian Longzhou and Aofu Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Longzhou and Aofu Environmental
The main advantage of trading using opposite Fujian Longzhou and Aofu Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Longzhou 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.| Fujian Longzhou vs. Aofu Environmental Technology | Fujian Longzhou vs. Dongjiang Environmental Co | Fujian Longzhou vs. Allied Machinery Co | Fujian Longzhou vs. Nanxing Furniture Machinery |
| Aofu Environmental vs. Zijin Mining Group | Aofu Environmental vs. Wanhua Chemical Group | Aofu Environmental vs. Baoshan Iron Steel | Aofu Environmental vs. Shandong Gold Mining |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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