Correlation Between Aofu Environmental and Guangzhou Restaurants
Specify exactly 2 symbols:
By analyzing existing cross correlation between Aofu Environmental Technology and Guangzhou Restaurants Group, you can compare the effects of market volatilities on Aofu Environmental and Guangzhou Restaurants 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 Guangzhou Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aofu Environmental and Guangzhou Restaurants.
Diversification Opportunities for Aofu Environmental and Guangzhou Restaurants
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aofu and Guangzhou is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Aofu Environmental Technology and Guangzhou Restaurants Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Restaurants 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 Guangzhou Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Restaurants has no effect on the direction of Aofu Environmental i.e., Aofu Environmental and Guangzhou Restaurants go up and down completely randomly.
Pair Corralation between Aofu Environmental and Guangzhou Restaurants
Assuming the 90 days trading horizon Aofu Environmental Technology is expected to generate 1.4 times more return on investment than Guangzhou Restaurants. However, Aofu Environmental is 1.4 times more volatile than Guangzhou Restaurants Group. It trades about 0.14 of its potential returns per unit of risk. Guangzhou Restaurants Group is currently generating about 0.13 per unit of risk. If you would invest 807.00 in Aofu Environmental Technology on September 25, 2024 and sell it today you would earn a total of 277.00 from holding Aofu Environmental Technology or generate 34.32% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Aofu Environmental Technology vs. Guangzhou Restaurants Group
Performance |
Timeline |
Aofu Environmental |
Guangzhou Restaurants |
Aofu Environmental and Guangzhou Restaurants Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aofu Environmental and Guangzhou Restaurants
The main advantage of trading using opposite Aofu Environmental and Guangzhou Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aofu Environmental position performs unexpectedly, Guangzhou Restaurants 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 Guangzhou Restaurants will offset losses from the drop in Guangzhou Restaurants' long position.Aofu Environmental vs. China Construction Bank | Aofu Environmental vs. Southchip Semiconductor Technology | Aofu Environmental vs. StarPower Semiconductor | Aofu Environmental vs. GRG Banking Equipment |
Guangzhou Restaurants vs. Dalian Thermal Power | Guangzhou Restaurants vs. Western Metal Materials | Guangzhou Restaurants vs. Hengdian Entertainment Co | Guangzhou Restaurants vs. Guangzhou Jinyi Media |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |