Correlation Between Aofu Environmental and Shanghai CEO
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By analyzing existing cross correlation between Aofu Environmental Technology and Shanghai CEO Environmental, you can compare the effects of market volatilities on Aofu Environmental and Shanghai CEO 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 Shanghai CEO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aofu Environmental and Shanghai CEO.
Diversification Opportunities for Aofu Environmental and Shanghai CEO
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aofu and Shanghai is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Aofu Environmental Technology and Shanghai CEO Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai CEO Environ 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 Shanghai CEO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai CEO Environ has no effect on the direction of Aofu Environmental i.e., Aofu Environmental and Shanghai CEO go up and down completely randomly.
Pair Corralation between Aofu Environmental and Shanghai CEO
Assuming the 90 days trading horizon Aofu Environmental Technology is expected to under-perform the Shanghai CEO. In addition to that, Aofu Environmental is 1.15 times more volatile than Shanghai CEO Environmental. It trades about -0.11 of its total potential returns per unit of risk. Shanghai CEO Environmental is currently generating about 0.02 per unit of volatility. If you would invest 863.00 in Shanghai CEO Environmental on October 29, 2024 and sell it today you would earn a total of 4.00 from holding Shanghai CEO Environmental or generate 0.46% 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. Shanghai CEO Environmental
Performance |
| Timeline |
| Aofu Environmental |
| Shanghai CEO Environ |
Aofu Environmental and Shanghai CEO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aofu Environmental and Shanghai CEO
The main advantage of trading using opposite Aofu Environmental and Shanghai CEO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aofu Environmental position performs unexpectedly, Shanghai CEO 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 Shanghai CEO will offset losses from the drop in Shanghai CEO's long position.| 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 |
| Shanghai CEO vs. China Petroleum Chemical | Shanghai CEO vs. PetroChina Co Ltd | Shanghai CEO vs. China State Construction | Shanghai CEO vs. China Railway Group |
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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