Correlation Between Xinjiang Beixin and Aurora Optoelectronics
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By analyzing existing cross correlation between Xinjiang Beixin RoadBridge and Aurora Optoelectronics Co, you can compare the effects of market volatilities on Xinjiang Beixin 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 Xinjiang Beixin with a short position of Aurora Optoelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Beixin and Aurora Optoelectronics.
Diversification Opportunities for Xinjiang Beixin and Aurora Optoelectronics
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xinjiang and Aurora is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Beixin RoadBridge and Aurora Optoelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Optoelectronics and Xinjiang Beixin 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 Xinjiang Beixin RoadBridge 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 Xinjiang Beixin i.e., Xinjiang Beixin and Aurora Optoelectronics go up and down completely randomly.
Pair Corralation between Xinjiang Beixin and Aurora Optoelectronics
Assuming the 90 days trading horizon Xinjiang Beixin RoadBridge is expected to under-perform the Aurora Optoelectronics. But the stock apears to be less risky and, when comparing its historical volatility, Xinjiang Beixin RoadBridge is 1.18 times less risky than Aurora Optoelectronics. The stock trades about -0.23 of its potential returns per unit of risk. The Aurora Optoelectronics Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 285.00 in Aurora Optoelectronics Co on December 30, 2024 and sell it today you would lose (2.00) from holding Aurora Optoelectronics Co or give up 0.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinjiang Beixin RoadBridge vs. Aurora Optoelectronics Co
Performance |
| Timeline |
| Xinjiang Beixin Road |
| Aurora Optoelectronics |
Xinjiang Beixin and Aurora Optoelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Beixin and Aurora Optoelectronics
The main advantage of trading using opposite Xinjiang Beixin and Aurora Optoelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Beixin 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.| Xinjiang Beixin vs. Zhejiang Daily Media | Xinjiang Beixin vs. GUOMAI Culture Media | Xinjiang Beixin vs. Duzhe Publishing Media | Xinjiang Beixin vs. Inly Media 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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