Correlation Between Aofu Environmental and Jonjee Hi-tech
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By analyzing existing cross correlation between Aofu Environmental Technology and Jonjee Hi tech Industrial, you can compare the effects of market volatilities on Aofu Environmental and Jonjee Hi-tech 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 Jonjee Hi-tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aofu Environmental and Jonjee Hi-tech.
Diversification Opportunities for Aofu Environmental and Jonjee Hi-tech
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aofu and Jonjee is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Aofu Environmental Technology and Jonjee Hi tech Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jonjee Hi tech 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 Jonjee Hi-tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jonjee Hi tech has no effect on the direction of Aofu Environmental i.e., Aofu Environmental and Jonjee Hi-tech go up and down completely randomly.
Pair Corralation between Aofu Environmental and Jonjee Hi-tech
Assuming the 90 days trading horizon Aofu Environmental Technology is expected to generate 0.95 times more return on investment than Jonjee Hi-tech. However, Aofu Environmental Technology is 1.06 times less risky than Jonjee Hi-tech. It trades about 0.08 of its potential returns per unit of risk. Jonjee Hi tech Industrial is currently generating about 0.06 per unit of risk. If you would invest 1,132 in Aofu Environmental Technology on September 1, 2024 and sell it today you would earn a total of 48.00 from holding Aofu Environmental Technology or generate 4.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aofu Environmental Technology vs. Jonjee Hi tech Industrial
Performance |
| Timeline |
| Aofu Environmental |
| Jonjee Hi tech |
Aofu Environmental and Jonjee Hi-tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aofu Environmental and Jonjee Hi-tech
The main advantage of trading using opposite Aofu Environmental and Jonjee Hi-tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aofu Environmental position performs unexpectedly, Jonjee Hi-tech 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 Jonjee Hi-tech will offset losses from the drop in Jonjee Hi-tech's long position.The idea behind Aofu Environmental Technology and Jonjee Hi tech Industrial 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.
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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