Correlation Between Tianjin Capital and Aofu Environmental
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By analyzing existing cross correlation between Tianjin Capital Environmental and Aofu Environmental Technology, you can compare the effects of market volatilities on Tianjin Capital 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 Tianjin Capital with a short position of Aofu Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and Aofu Environmental.
Diversification Opportunities for Tianjin Capital and Aofu Environmental
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tianjin and Aofu is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and Aofu Environmental Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aofu Environmental and Tianjin Capital 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 Tianjin Capital Environmental 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 Tianjin Capital i.e., Tianjin Capital and Aofu Environmental go up and down completely randomly.
Pair Corralation between Tianjin Capital and Aofu Environmental
Assuming the 90 days trading horizon Tianjin Capital Environmental is expected to generate 0.4 times more return on investment than Aofu Environmental. However, Tianjin Capital Environmental is 2.52 times less risky than Aofu Environmental. It trades about -0.51 of its potential returns per unit of risk. Aofu Environmental Technology is currently generating about -0.43 per unit of risk. If you would invest 619.00 in Tianjin Capital Environmental on October 15, 2024 and sell it today you would lose (71.00) from holding Tianjin Capital Environmental or give up 11.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianjin Capital Environmental vs. Aofu Environmental Technology
Performance |
| Timeline |
| Tianjin Capital Envi |
| Aofu Environmental |
Tianjin Capital and Aofu Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Capital and Aofu Environmental
The main advantage of trading using opposite Tianjin Capital and Aofu Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Capital 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.| Tianjin Capital vs. Quectel Wireless Solutions | Tianjin Capital vs. Eastern Communications Co | Tianjin Capital vs. Fiberhome Telecommunication Technologies | Tianjin Capital vs. Tongyu Communication |
| Aofu Environmental vs. Penyao Environmental Protection | Aofu Environmental vs. Shenwu Energy Saving | Aofu Environmental vs. Shenzhen MYS Environmental | Aofu Environmental vs. GreenTech Environmental 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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