Correlation Between Tibet Huayu and Aofu Environmental
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By analyzing existing cross correlation between Tibet Huayu Mining and Aofu Environmental Technology, you can compare the effects of market volatilities on Tibet Huayu 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 Tibet Huayu with a short position of Aofu Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tibet Huayu and Aofu Environmental.
Diversification Opportunities for Tibet Huayu and Aofu Environmental
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tibet and Aofu is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Tibet Huayu Mining and Aofu Environmental Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aofu Environmental and Tibet Huayu 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 Tibet Huayu Mining 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 Tibet Huayu i.e., Tibet Huayu and Aofu Environmental go up and down completely randomly.
Pair Corralation between Tibet Huayu and Aofu Environmental
Assuming the 90 days trading horizon Tibet Huayu Mining is expected to generate 1.06 times more return on investment than Aofu Environmental. However, Tibet Huayu is 1.06 times more volatile than Aofu Environmental Technology. It trades about 0.09 of its potential returns per unit of risk. Aofu Environmental Technology is currently generating about -0.02 per unit of risk. If you would invest 738.00 in Tibet Huayu Mining on October 29, 2024 and sell it today you would earn a total of 666.00 from holding Tibet Huayu Mining or generate 90.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tibet Huayu Mining vs. Aofu Environmental Technology
Performance |
| Timeline |
| Tibet Huayu Mining |
| Aofu Environmental |
Tibet Huayu and Aofu Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tibet Huayu and Aofu Environmental
The main advantage of trading using opposite Tibet Huayu and Aofu Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tibet Huayu 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.| Tibet Huayu vs. Zijin Mining Group | Tibet Huayu vs. Wanhua Chemical Group | Tibet Huayu vs. Baoshan Iron Steel | Tibet Huayu vs. Shandong Gold Mining |
| Aofu Environmental vs. Gifore Agricultural Machinery | Aofu Environmental vs. Lutian Machinery Co | Aofu Environmental vs. Zhongshan Broad Ocean Motor | Aofu Environmental vs. Huasi Agricultural Development |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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