Correlation Between Maccura Biotechnology and Aofu Environmental
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By analyzing existing cross correlation between Maccura Biotechnology Co and Aofu Environmental Technology, you can compare the effects of market volatilities on Maccura Biotechnology 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 Maccura Biotechnology with a short position of Aofu Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maccura Biotechnology and Aofu Environmental.
Diversification Opportunities for Maccura Biotechnology and Aofu Environmental
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Maccura and Aofu is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Maccura Biotechnology 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 Maccura Biotechnology 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 Maccura Biotechnology 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 Maccura Biotechnology i.e., Maccura Biotechnology and Aofu Environmental go up and down completely randomly.
Pair Corralation between Maccura Biotechnology and Aofu Environmental
Assuming the 90 days trading horizon Maccura Biotechnology Co is expected to under-perform the Aofu Environmental. But the stock apears to be less risky and, when comparing its historical volatility, Maccura Biotechnology Co is 1.81 times less risky than Aofu Environmental. The stock trades about -0.19 of its potential returns per unit of risk. The Aofu Environmental Technology is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 960.00 in Aofu Environmental Technology on November 6, 2024 and sell it today you would earn a total of 27.00 from holding Aofu Environmental Technology or generate 2.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maccura Biotechnology Co vs. Aofu Environmental Technology
Performance |
| Timeline |
| Maccura Biotechnology |
| Aofu Environmental |
Maccura Biotechnology and Aofu Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maccura Biotechnology and Aofu Environmental
The main advantage of trading using opposite Maccura Biotechnology and Aofu Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maccura Biotechnology 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.The idea behind Maccura Biotechnology Co and Aofu Environmental Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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