Correlation Between Penyao Environmental and Aofu Environmental
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By analyzing existing cross correlation between Penyao Environmental Protection and Aofu Environmental Technology, you can compare the effects of market volatilities on Penyao Environmental 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 Penyao Environmental with a short position of Aofu Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penyao Environmental and Aofu Environmental.
Diversification Opportunities for Penyao Environmental and Aofu Environmental
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Penyao and Aofu is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Penyao Environmental Protectio and Aofu Environmental Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aofu Environmental and Penyao Environmental 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 Penyao Environmental Protection 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 Penyao Environmental i.e., Penyao Environmental and Aofu Environmental go up and down completely randomly.
Pair Corralation between Penyao Environmental and Aofu Environmental
Assuming the 90 days trading horizon Penyao Environmental Protection is expected to generate 1.86 times more return on investment than Aofu Environmental. However, Penyao Environmental is 1.86 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 -0.13 per unit of risk. If you would invest 561.00 in Penyao Environmental Protection on September 27, 2024 and sell it today you would earn a total of 7.00 from holding Penyao Environmental Protection or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penyao Environmental Protectio vs. Aofu Environmental Technology
Performance |
| Timeline |
| Penyao Environmental |
| Aofu Environmental |
Penyao Environmental and Aofu Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penyao Environmental and Aofu Environmental
The main advantage of trading using opposite Penyao Environmental and Aofu Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penyao Environmental 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.| Penyao Environmental vs. Shenzhen MYS Environmental | Penyao Environmental vs. AVIC Fund Management | Penyao Environmental vs. Shenzhen Bingchuan Network | Penyao Environmental vs. Penghua Shenzhen Energy |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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