Correlation Between Masterwork Machinery and Aofu Environmental
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By analyzing existing cross correlation between Masterwork Machinery and Aofu Environmental Technology, you can compare the effects of market volatilities on Masterwork Machinery 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 Masterwork Machinery with a short position of Aofu Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Masterwork Machinery and Aofu Environmental.
Diversification Opportunities for Masterwork Machinery and Aofu Environmental
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Masterwork and Aofu is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Masterwork Machinery and Aofu Environmental Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aofu Environmental and Masterwork Machinery 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 Masterwork Machinery 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 Masterwork Machinery i.e., Masterwork Machinery and Aofu Environmental go up and down completely randomly.
Pair Corralation between Masterwork Machinery and Aofu Environmental
Assuming the 90 days trading horizon Masterwork Machinery is expected to generate 1.12 times more return on investment than Aofu Environmental. However, Masterwork Machinery is 1.12 times more volatile than Aofu Environmental Technology. It trades about -0.03 of its potential returns per unit of risk. Aofu Environmental Technology is currently generating about -0.11 per unit of risk. If you would invest 584.00 in Masterwork Machinery on October 27, 2024 and sell it today you would lose (14.00) from holding Masterwork Machinery or give up 2.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Masterwork Machinery vs. Aofu Environmental Technology
Performance |
| Timeline |
| Masterwork Machinery |
| Aofu Environmental |
Masterwork Machinery and Aofu Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Masterwork Machinery and Aofu Environmental
The main advantage of trading using opposite Masterwork Machinery and Aofu Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Masterwork Machinery 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.| Masterwork Machinery vs. Hainan Haiqi Transportation | Masterwork Machinery vs. Shenyang Blue Silver | Masterwork Machinery vs. JCHX Mining Management | Masterwork Machinery vs. Shengda Mining Co |
| Aofu Environmental vs. Miracll Chemicals Co | Aofu Environmental vs. CICT Mobile Communication | Aofu Environmental vs. Railway Signal Communication | Aofu Environmental vs. Eastern Communications Co |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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