Correlation Between Citic Guoan and Aofu Environmental
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By analyzing existing cross correlation between Citic Guoan Wine and Aofu Environmental Technology, you can compare the effects of market volatilities on Citic Guoan 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 Citic Guoan with a short position of Aofu Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Guoan and Aofu Environmental.
Diversification Opportunities for Citic Guoan and Aofu Environmental
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citic and Aofu is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Citic Guoan Wine and Aofu Environmental Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aofu Environmental and Citic Guoan 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 Citic Guoan Wine 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 Citic Guoan i.e., Citic Guoan and Aofu Environmental go up and down completely randomly.
Pair Corralation between Citic Guoan and Aofu Environmental
Assuming the 90 days trading horizon Citic Guoan is expected to generate 1.57 times less return on investment than Aofu Environmental. But when comparing it to its historical volatility, Citic Guoan Wine is 1.36 times less risky than Aofu Environmental. It trades about 0.07 of its potential returns per unit of risk. 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 |
Citic Guoan Wine vs. Aofu Environmental Technology
Performance |
| Timeline |
| Citic Guoan Wine |
| Aofu Environmental |
Citic Guoan and Aofu Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Guoan and Aofu Environmental
The main advantage of trading using opposite Citic Guoan and Aofu Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Guoan 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.| Citic Guoan vs. Tieling Newcity Investment | Citic Guoan vs. Spring Airlines Co | Citic Guoan vs. Shenzhen Topway Video | Citic Guoan vs. Jinling Hotel Corp |
| Aofu Environmental vs. Eyebright Medical Technology | Aofu Environmental vs. Shandong Intco Medical | Aofu Environmental vs. Linkage Software Co | Aofu Environmental vs. Shenzhen AV Display 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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