Correlation Between Aofu Environmental and Fujian Oriental
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By analyzing existing cross correlation between Aofu Environmental Technology and Fujian Oriental Silver, you can compare the effects of market volatilities on Aofu Environmental and Fujian Oriental 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 Aofu Environmental with a short position of Fujian Oriental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aofu Environmental and Fujian Oriental.
Diversification Opportunities for Aofu Environmental and Fujian Oriental
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aofu and Fujian is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Aofu Environmental Technology and Fujian Oriental Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Oriental Silver and Aofu Environmental 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 Aofu Environmental Technology are associated (or correlated) with Fujian Oriental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Oriental Silver has no effect on the direction of Aofu Environmental i.e., Aofu Environmental and Fujian Oriental go up and down completely randomly.
Pair Corralation between Aofu Environmental and Fujian Oriental
Assuming the 90 days trading horizon Aofu Environmental Technology is expected to generate 0.96 times more return on investment than Fujian Oriental. However, Aofu Environmental Technology is 1.04 times less risky than Fujian Oriental. It trades about -0.43 of its potential returns per unit of risk. Fujian Oriental Silver is currently generating about -0.44 per unit of risk. If you would invest 1,242 in Aofu Environmental Technology on October 15, 2024 and sell it today you would lose (289.00) from holding Aofu Environmental Technology or give up 23.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aofu Environmental Technology vs. Fujian Oriental Silver
Performance |
| Timeline |
| Aofu Environmental |
| Fujian Oriental Silver |
Aofu Environmental and Fujian Oriental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aofu Environmental and Fujian Oriental
The main advantage of trading using opposite Aofu Environmental and Fujian Oriental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aofu Environmental position performs unexpectedly, Fujian Oriental 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 Fujian Oriental will offset losses from the drop in Fujian Oriental's long position.| Aofu Environmental vs. Penyao Environmental Protection | Aofu Environmental vs. Shenwu Energy Saving | Aofu Environmental vs. Shenzhen MYS Environmental | Aofu Environmental vs. GreenTech Environmental Co |
| Fujian Oriental vs. Nexchip Semiconductor Corp | Fujian Oriental vs. Jiangsu Phoenix Publishing | Fujian Oriental vs. Shanghai V Test Semiconductor | Fujian Oriental vs. Southchip Semiconductor Technology |
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.
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