Correlation Between Aofu Environmental and Metro Investment
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By analyzing existing cross correlation between Aofu Environmental Technology and Metro Investment Development, you can compare the effects of market volatilities on Aofu Environmental and Metro Investment 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 Metro Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aofu Environmental and Metro Investment.
Diversification Opportunities for Aofu Environmental and Metro Investment
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aofu and Metro is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Aofu Environmental Technology and Metro Investment Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Investment Dev 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 Metro Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Investment Dev has no effect on the direction of Aofu Environmental i.e., Aofu Environmental and Metro Investment go up and down completely randomly.
Pair Corralation between Aofu Environmental and Metro Investment
Assuming the 90 days trading horizon Aofu Environmental Technology is expected to under-perform the Metro Investment. In addition to that, Aofu Environmental is 1.07 times more volatile than Metro Investment Development. It trades about -0.11 of its total potential returns per unit of risk. Metro Investment Development is currently generating about 0.05 per unit of volatility. If you would invest 426.00 in Metro Investment Development on September 24, 2024 and sell it today you would earn a total of 9.00 from holding Metro Investment Development or generate 2.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.45% |
Values | Daily Returns |
Aofu Environmental Technology vs. Metro Investment Development
Performance |
Timeline |
Aofu Environmental |
Metro Investment Dev |
Aofu Environmental and Metro Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aofu Environmental and Metro Investment
The main advantage of trading using opposite Aofu Environmental and Metro Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aofu Environmental position performs unexpectedly, Metro Investment 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 Metro Investment will offset losses from the drop in Metro Investment's long position.Aofu Environmental vs. Metro Investment Development | Aofu Environmental vs. Jinhui Liquor Co | Aofu Environmental vs. Guocheng Mining Co | Aofu Environmental vs. Xiandai Investment Co |
Metro Investment vs. PetroChina Co Ltd | Metro Investment vs. China Mobile Limited | Metro Investment vs. CNOOC Limited | Metro Investment vs. Ping An Insurance |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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