Correlation Between Guangzhou Seagull and Aurora Optoelectronics
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By analyzing existing cross correlation between Guangzhou Seagull Kitchen and Aurora Optoelectronics Co, you can compare the effects of market volatilities on Guangzhou Seagull 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 Guangzhou Seagull with a short position of Aurora Optoelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Seagull and Aurora Optoelectronics.
Diversification Opportunities for Guangzhou Seagull and Aurora Optoelectronics
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangzhou and Aurora is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Seagull Kitchen and Aurora Optoelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Optoelectronics and Guangzhou Seagull 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 Guangzhou Seagull Kitchen 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 Guangzhou Seagull i.e., Guangzhou Seagull and Aurora Optoelectronics go up and down completely randomly.
Pair Corralation between Guangzhou Seagull and Aurora Optoelectronics
Assuming the 90 days trading horizon Guangzhou Seagull Kitchen is expected to generate 0.95 times more return on investment than Aurora Optoelectronics. However, Guangzhou Seagull Kitchen is 1.05 times less risky than Aurora Optoelectronics. It trades about -0.09 of its potential returns per unit of risk. Aurora Optoelectronics Co is currently generating about -0.23 per unit of risk. If you would invest 305.00 in Guangzhou Seagull Kitchen on October 24, 2024 and sell it today you would lose (23.00) from holding Guangzhou Seagull Kitchen or give up 7.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Seagull Kitchen vs. Aurora Optoelectronics Co
Performance |
| Timeline |
| Guangzhou Seagull Kitchen |
| Aurora Optoelectronics |
Guangzhou Seagull and Aurora Optoelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Seagull and Aurora Optoelectronics
The main advantage of trading using opposite Guangzhou Seagull and Aurora Optoelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Seagull 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.| Guangzhou Seagull vs. Shandong Homey Aquatic | Guangzhou Seagull vs. Ziel Home Furnishing | Guangzhou Seagull vs. Luyin Investment Group | Guangzhou Seagull vs. Kunwu Jiuding Investment |
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