Correlation Between Aofu Environmental and Tianjin Capital
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By analyzing existing cross correlation between Aofu Environmental Technology and Tianjin Capital Environmental, you can compare the effects of market volatilities on Aofu Environmental and Tianjin Capital 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 Tianjin Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aofu Environmental and Tianjin Capital.
Diversification Opportunities for Aofu Environmental and Tianjin Capital
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aofu and Tianjin is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Aofu Environmental Technology and Tianjin Capital Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Capital Envi 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 Tianjin Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Capital Envi has no effect on the direction of Aofu Environmental i.e., Aofu Environmental and Tianjin Capital go up and down completely randomly.
Pair Corralation between Aofu Environmental and Tianjin Capital
Assuming the 90 days trading horizon Aofu Environmental Technology is expected to under-perform the Tianjin Capital. In addition to that, Aofu Environmental is 2.52 times more volatile than Tianjin Capital Environmental. It trades about -0.43 of its total potential returns per unit of risk. Tianjin Capital Environmental is currently generating about -0.51 per unit of volatility. 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 |
Aofu Environmental Technology vs. Tianjin Capital Environmental
Performance |
| Timeline |
| Aofu Environmental |
| Tianjin Capital Envi |
Aofu Environmental and Tianjin Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aofu Environmental and Tianjin Capital
The main advantage of trading using opposite Aofu Environmental and Tianjin Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aofu Environmental position performs unexpectedly, Tianjin Capital 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 Tianjin Capital will offset losses from the drop in Tianjin Capital'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 |
| Tianjin Capital vs. Quectel Wireless Solutions | Tianjin Capital vs. Eastern Communications Co | Tianjin Capital vs. Fiberhome Telecommunication Technologies | Tianjin Capital vs. Tongyu Communication |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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