Correlation Between Aba Chemicals and Leyard Optoelectronic
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By analyzing existing cross correlation between Aba Chemicals Corp and Leyard Optoelectronic, you can compare the effects of market volatilities on Aba Chemicals and Leyard Optoelectronic 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 Aba Chemicals with a short position of Leyard Optoelectronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aba Chemicals and Leyard Optoelectronic.
Diversification Opportunities for Aba Chemicals and Leyard Optoelectronic
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aba and Leyard is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Aba Chemicals Corp and Leyard Optoelectronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leyard Optoelectronic and Aba Chemicals 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 Aba Chemicals Corp are associated (or correlated) with Leyard Optoelectronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leyard Optoelectronic has no effect on the direction of Aba Chemicals i.e., Aba Chemicals and Leyard Optoelectronic go up and down completely randomly.
Pair Corralation between Aba Chemicals and Leyard Optoelectronic
Assuming the 90 days trading horizon Aba Chemicals Corp is expected to under-perform the Leyard Optoelectronic. In addition to that, Aba Chemicals is 1.39 times more volatile than Leyard Optoelectronic. It trades about -0.01 of its total potential returns per unit of risk. Leyard Optoelectronic is currently generating about 0.02 per unit of volatility. If you would invest 553.00 in Leyard Optoelectronic on September 12, 2024 and sell it today you would earn a total of 87.00 from holding Leyard Optoelectronic or generate 15.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aba Chemicals Corp vs. Leyard Optoelectronic
Performance |
| Timeline |
| Aba Chemicals Corp |
| Leyard Optoelectronic |
Aba Chemicals and Leyard Optoelectronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aba Chemicals and Leyard Optoelectronic
The main advantage of trading using opposite Aba Chemicals and Leyard Optoelectronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aba Chemicals position performs unexpectedly, Leyard Optoelectronic 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 Leyard Optoelectronic will offset losses from the drop in Leyard Optoelectronic's long position.| Aba Chemicals vs. Semiconductor Manufacturing Electronics | Aba Chemicals vs. GigaDevice SemiconductorBeiji | Aba Chemicals vs. Qinghaihuading Industrial Co | Aba Chemicals vs. MayAir Technology Co |
| Leyard Optoelectronic vs. Gansu Jiu Steel | Leyard Optoelectronic vs. Shandong Mining Machinery | Leyard Optoelectronic vs. Aba Chemicals Corp | Leyard Optoelectronic vs. BlueFocus Communication Group |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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