Correlation Between Sichuan Jinshi and Aurora Optoelectronics
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By analyzing existing cross correlation between Sichuan Jinshi Technology and Aurora Optoelectronics Co, you can compare the effects of market volatilities on Sichuan Jinshi 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 Sichuan Jinshi with a short position of Aurora Optoelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Jinshi and Aurora Optoelectronics.
Diversification Opportunities for Sichuan Jinshi and Aurora Optoelectronics
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sichuan and Aurora is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Jinshi Technology and Aurora Optoelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Optoelectronics and Sichuan Jinshi 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 Sichuan Jinshi Technology 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 Sichuan Jinshi i.e., Sichuan Jinshi and Aurora Optoelectronics go up and down completely randomly.
Pair Corralation between Sichuan Jinshi and Aurora Optoelectronics
Assuming the 90 days trading horizon Sichuan Jinshi is expected to generate 1.04 times less return on investment than Aurora Optoelectronics. But when comparing it to its historical volatility, Sichuan Jinshi Technology is 1.9 times less risky than Aurora Optoelectronics. It trades about 0.14 of its potential returns per unit of risk. Aurora Optoelectronics Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 238.00 in Aurora Optoelectronics Co on August 31, 2024 and sell it today you would earn a total of 15.00 from holding Aurora Optoelectronics Co or generate 6.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Jinshi Technology vs. Aurora Optoelectronics Co
Performance |
| Timeline |
| Sichuan Jinshi Technology |
| Aurora Optoelectronics |
Sichuan Jinshi and Aurora Optoelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Jinshi and Aurora Optoelectronics
The main advantage of trading using opposite Sichuan Jinshi and Aurora Optoelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Jinshi 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 Sichuan Jinshi Technology 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.| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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