Correlation Between China Longyuan and Aurora Optoelectronics
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By analyzing existing cross correlation between China Longyuan Power and Aurora Optoelectronics Co, you can compare the effects of market volatilities on China Longyuan 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 China Longyuan with a short position of Aurora Optoelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Longyuan and Aurora Optoelectronics.
Diversification Opportunities for China Longyuan and Aurora Optoelectronics
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Aurora is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding China Longyuan Power and Aurora Optoelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Optoelectronics and China Longyuan 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 China Longyuan Power 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 China Longyuan i.e., China Longyuan and Aurora Optoelectronics go up and down completely randomly.
Pair Corralation between China Longyuan and Aurora Optoelectronics
Assuming the 90 days trading horizon China Longyuan Power is expected to generate 0.44 times more return on investment than Aurora Optoelectronics. However, China Longyuan Power is 2.29 times less risky than Aurora Optoelectronics. It trades about -0.3 of its potential returns per unit of risk. Aurora Optoelectronics Co is currently generating about -0.18 per unit of risk. If you would invest 1,617 in China Longyuan Power on October 28, 2024 and sell it today you would lose (140.00) from holding China Longyuan Power or give up 8.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Longyuan Power vs. Aurora Optoelectronics Co
Performance |
| Timeline |
| China Longyuan Power |
| Aurora Optoelectronics |
China Longyuan and Aurora Optoelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Longyuan and Aurora Optoelectronics
The main advantage of trading using opposite China Longyuan and Aurora Optoelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Longyuan 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.| China Longyuan vs. Jiangsu Xinri E Vehicle | China Longyuan vs. Zotye Automobile Co | China Longyuan vs. Namchow Food Group | China Longyuan vs. Iat Automobile Technology |
| Aurora Optoelectronics vs. Shanghai Ziyan Foods | Aurora Optoelectronics vs. Haima Automobile Group | Aurora Optoelectronics vs. Wintao Communications Co | Aurora Optoelectronics vs. Tongyu Communication |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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