Correlation Between Chongqing Road and Aofu Environmental
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By analyzing existing cross correlation between Chongqing Road Bridge and Aofu Environmental Technology, you can compare the effects of market volatilities on Chongqing Road 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 Chongqing Road with a short position of Aofu Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Road and Aofu Environmental.
Diversification Opportunities for Chongqing Road and Aofu Environmental
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chongqing and Aofu is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Road Bridge and Aofu Environmental Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aofu Environmental and Chongqing Road 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 Chongqing Road Bridge 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 Chongqing Road i.e., Chongqing Road and Aofu Environmental go up and down completely randomly.
Pair Corralation between Chongqing Road and Aofu Environmental
Assuming the 90 days trading horizon Chongqing Road Bridge is expected to under-perform the Aofu Environmental. In addition to that, Chongqing Road is 1.24 times more volatile than Aofu Environmental Technology. It trades about -0.03 of its total potential returns per unit of risk. Aofu Environmental Technology is currently generating about 0.08 per unit of volatility. If you would invest 1,132 in Aofu Environmental Technology on September 1, 2024 and sell it today you would earn a total of 48.00 from holding Aofu Environmental Technology or generate 4.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Road Bridge vs. Aofu Environmental Technology
Performance |
| Timeline |
| Chongqing Road Bridge |
| Aofu Environmental |
Chongqing Road and Aofu Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Road and Aofu Environmental
The main advantage of trading using opposite Chongqing Road and Aofu Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Road 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.| Chongqing Road vs. Orinko Advanced Plastics | Chongqing Road vs. Levima Advanced Materials | Chongqing Road vs. Super Dragon Engineering Plastics | Chongqing Road vs. Hengkang Medical Group |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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