Correlation Between Zhejiang Juhua and Aofu Environmental
Specify exactly 2 symbols:
By analyzing existing cross correlation between Zhejiang Juhua Co and Aofu Environmental Technology, you can compare the effects of market volatilities on Zhejiang Juhua 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 Zhejiang Juhua with a short position of Aofu Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Juhua and Aofu Environmental.
Diversification Opportunities for Zhejiang Juhua and Aofu Environmental
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Zhejiang and Aofu is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Juhua 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 Zhejiang Juhua 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 Zhejiang Juhua 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 Zhejiang Juhua i.e., Zhejiang Juhua and Aofu Environmental go up and down completely randomly.
Pair Corralation between Zhejiang Juhua and Aofu Environmental
Assuming the 90 days trading horizon Zhejiang Juhua is expected to generate 1.78 times less return on investment than Aofu Environmental. But when comparing it to its historical volatility, Zhejiang Juhua Co is 1.17 times less risky than Aofu Environmental. It trades about 0.08 of its potential returns per unit of risk. Aofu Environmental Technology is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,088 in Aofu Environmental Technology on August 31, 2024 and sell it today you would earn a total of 76.00 from holding Aofu Environmental Technology or generate 6.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Juhua Co vs. Aofu Environmental Technology
Performance |
| Timeline |
| Zhejiang Juhua |
| Aofu Environmental |
Zhejiang Juhua and Aofu Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Juhua and Aofu Environmental
The main advantage of trading using opposite Zhejiang Juhua and Aofu Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Juhua 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 Zhejiang Juhua 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.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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |