Correlation Between Integrated Electronic and Aurora Optoelectronics
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By analyzing existing cross correlation between Integrated Electronic Systems and Aurora Optoelectronics Co, you can compare the effects of market volatilities on Integrated Electronic 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 Integrated Electronic with a short position of Aurora Optoelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Electronic and Aurora Optoelectronics.
Diversification Opportunities for Integrated Electronic and Aurora Optoelectronics
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Integrated and Aurora is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Electronic Systems and Aurora Optoelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Optoelectronics and Integrated Electronic 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 Integrated Electronic Systems 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 Integrated Electronic i.e., Integrated Electronic and Aurora Optoelectronics go up and down completely randomly.
Pair Corralation between Integrated Electronic and Aurora Optoelectronics
Assuming the 90 days trading horizon Integrated Electronic is expected to generate 1.05 times less return on investment than Aurora Optoelectronics. In addition to that, Integrated Electronic is 1.07 times more volatile than Aurora Optoelectronics Co. It trades about 0.06 of its total potential returns per unit of risk. Aurora Optoelectronics Co is currently generating about 0.06 per unit of volatility. If you would invest 185.00 in Aurora Optoelectronics Co on August 28, 2024 and sell it today you would earn a total of 72.00 from holding Aurora Optoelectronics Co or generate 38.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Integrated Electronic Systems vs. Aurora Optoelectronics Co
Performance |
| Timeline |
| Integrated Electronic |
| Aurora Optoelectronics |
Integrated Electronic and Aurora Optoelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integrated Electronic and Aurora Optoelectronics
The main advantage of trading using opposite Integrated Electronic and Aurora Optoelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Electronic 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.The idea behind Integrated Electronic Systems and Aurora Optoelectronics Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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