Correlation Between BTG Hotels and Aofu Environmental
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By analyzing existing cross correlation between BTG Hotels Group and Aofu Environmental Technology, you can compare the effects of market volatilities on BTG Hotels 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 BTG Hotels with a short position of Aofu Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTG Hotels and Aofu Environmental.
Diversification Opportunities for BTG Hotels and Aofu Environmental
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BTG and Aofu is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding BTG Hotels Group and Aofu Environmental Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aofu Environmental and BTG Hotels 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 BTG Hotels Group 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 BTG Hotels i.e., BTG Hotels and Aofu Environmental go up and down completely randomly.
Pair Corralation between BTG Hotels and Aofu Environmental
Assuming the 90 days trading horizon BTG Hotels Group is expected to generate 0.75 times more return on investment than Aofu Environmental. However, BTG Hotels Group is 1.34 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 0.05 per unit of risk. If you would invest 1,235 in BTG Hotels Group on September 26, 2024 and sell it today you would earn a total of 258.00 from holding BTG Hotels Group or generate 20.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTG Hotels Group vs. Aofu Environmental Technology
Performance |
| Timeline |
| BTG Hotels Group |
| Aofu Environmental |
BTG Hotels and Aofu Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTG Hotels and Aofu Environmental
The main advantage of trading using opposite BTG Hotels and Aofu Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTG Hotels 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.| BTG Hotels vs. Bank of China | BTG Hotels vs. Kweichow Moutai Co | BTG Hotels vs. PetroChina Co Ltd | BTG Hotels vs. Bank of Communications |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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