Correlation Between Aofu Environmental and Jiangsu Pacific
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By analyzing existing cross correlation between Aofu Environmental Technology and Jiangsu Pacific Quartz, you can compare the effects of market volatilities on Aofu Environmental and Jiangsu Pacific 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 Jiangsu Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aofu Environmental and Jiangsu Pacific.
Diversification Opportunities for Aofu Environmental and Jiangsu Pacific
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aofu and Jiangsu is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Aofu Environmental Technology and Jiangsu Pacific Quartz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Pacific Quartz 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 Jiangsu Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Pacific Quartz has no effect on the direction of Aofu Environmental i.e., Aofu Environmental and Jiangsu Pacific go up and down completely randomly.
Pair Corralation between Aofu Environmental and Jiangsu Pacific
Assuming the 90 days trading horizon Aofu Environmental Technology is expected to generate 0.97 times more return on investment than Jiangsu Pacific. However, Aofu Environmental Technology is 1.03 times less risky than Jiangsu Pacific. It trades about 0.23 of its potential returns per unit of risk. Jiangsu Pacific Quartz is currently generating about 0.15 per unit of risk. If you would invest 771.00 in Aofu Environmental Technology on September 10, 2024 and sell it today you would earn a total of 467.00 from holding Aofu Environmental Technology or generate 60.57% 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. Jiangsu Pacific Quartz
Performance |
Timeline |
Aofu Environmental |
Jiangsu Pacific Quartz |
Aofu Environmental and Jiangsu Pacific Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aofu Environmental and Jiangsu Pacific
The main advantage of trading using opposite Aofu Environmental and Jiangsu Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aofu Environmental position performs unexpectedly, Jiangsu Pacific 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 Jiangsu Pacific will offset losses from the drop in Jiangsu Pacific's long position.Aofu Environmental vs. Zijin Mining Group | Aofu Environmental vs. Wanhua Chemical Group | Aofu Environmental vs. Baoshan Iron Steel | Aofu Environmental vs. Rongsheng Petrochemical Co |
Jiangsu Pacific vs. Lander Sports Development | Jiangsu Pacific vs. Unigroup Guoxin Microelectronics | Jiangsu Pacific vs. Integrated Electronic Systems | Jiangsu Pacific vs. Chengtun Mining 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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