Correlation Between Aofu Environmental and Tibet Huayu
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By analyzing existing cross correlation between Aofu Environmental Technology and Tibet Huayu Mining, you can compare the effects of market volatilities on Aofu Environmental and Tibet Huayu 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 Tibet Huayu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aofu Environmental and Tibet Huayu.
Diversification Opportunities for Aofu Environmental and Tibet Huayu
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aofu and Tibet is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Aofu Environmental Technology and Tibet Huayu Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tibet Huayu Mining 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 Tibet Huayu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tibet Huayu Mining has no effect on the direction of Aofu Environmental i.e., Aofu Environmental and Tibet Huayu go up and down completely randomly.
Pair Corralation between Aofu Environmental and Tibet Huayu
Assuming the 90 days trading horizon Aofu Environmental Technology is expected to under-perform the Tibet Huayu. In addition to that, Aofu Environmental is 1.67 times more volatile than Tibet Huayu Mining. It trades about -0.43 of its total potential returns per unit of risk. Tibet Huayu Mining is currently generating about -0.44 per unit of volatility. If you would invest 1,412 in Tibet Huayu Mining on October 15, 2024 and sell it today you would lose (209.00) from holding Tibet Huayu Mining or give up 14.8% 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. Tibet Huayu Mining
Performance |
| Timeline |
| Aofu Environmental |
| Tibet Huayu Mining |
Aofu Environmental and Tibet Huayu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aofu Environmental and Tibet Huayu
The main advantage of trading using opposite Aofu Environmental and Tibet Huayu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aofu Environmental position performs unexpectedly, Tibet Huayu 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 Tibet Huayu will offset losses from the drop in Tibet Huayu'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 |
| Tibet Huayu vs. Zijin Mining Group | Tibet Huayu vs. Wanhua Chemical Group | Tibet Huayu vs. Baoshan Iron Steel | Tibet Huayu vs. Shandong Gold Mining |
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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