Correlation Between North Huajin and Aurora Optoelectronics
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By analyzing existing cross correlation between North Huajin Chemical and Aurora Optoelectronics Co, you can compare the effects of market volatilities on North Huajin and Aurora Optoelectronics 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 North Huajin with a short position of Aurora Optoelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Huajin and Aurora Optoelectronics.
Diversification Opportunities for North Huajin and Aurora Optoelectronics
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between North and Aurora is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding North Huajin Chemical and Aurora Optoelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Optoelectronics and North Huajin 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 North Huajin Chemical are associated (or correlated) with Aurora Optoelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Optoelectronics has no effect on the direction of North Huajin i.e., North Huajin and Aurora Optoelectronics go up and down completely randomly.
Pair Corralation between North Huajin and Aurora Optoelectronics
Assuming the 90 days trading horizon North Huajin is expected to generate 3.73 times less return on investment than Aurora Optoelectronics. But when comparing it to its historical volatility, North Huajin Chemical is 1.37 times less risky than Aurora Optoelectronics. It trades about 0.06 of its potential returns per unit of risk. Aurora Optoelectronics Co is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 189.00 in Aurora Optoelectronics Co on September 3, 2024 and sell it today you would earn a total of 61.00 from holding Aurora Optoelectronics Co or generate 32.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
North Huajin Chemical vs. Aurora Optoelectronics Co
Performance |
| Timeline |
| North Huajin Chemical |
| Aurora Optoelectronics |
North Huajin and Aurora Optoelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North Huajin and Aurora Optoelectronics
The main advantage of trading using opposite North Huajin and Aurora Optoelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North Huajin position performs unexpectedly, Aurora Optoelectronics 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 Aurora Optoelectronics will offset losses from the drop in Aurora Optoelectronics' long position.| North Huajin vs. Zijin Mining Group | North Huajin vs. Baoshan Iron Steel | North Huajin vs. Rongsheng Petrochemical Co | North Huajin vs. Hoshine Silicon Ind |
| Aurora Optoelectronics vs. Cultural Investment Holdings | Aurora Optoelectronics vs. Gome Telecom Equipment | Aurora Optoelectronics vs. Bus Online Co | Aurora Optoelectronics vs. Holitech Technology Co |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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