Correlation Between Loctek Ergonomic and Aurora Optoelectronics
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By analyzing existing cross correlation between Loctek Ergonomic Technology and Aurora Optoelectronics Co, you can compare the effects of market volatilities on Loctek Ergonomic 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 Loctek Ergonomic with a short position of Aurora Optoelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loctek Ergonomic and Aurora Optoelectronics.
Diversification Opportunities for Loctek Ergonomic and Aurora Optoelectronics
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Loctek and Aurora is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Loctek Ergonomic 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 Loctek Ergonomic 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 Loctek Ergonomic 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 Loctek Ergonomic i.e., Loctek Ergonomic and Aurora Optoelectronics go up and down completely randomly.
Pair Corralation between Loctek Ergonomic and Aurora Optoelectronics
Assuming the 90 days trading horizon Loctek Ergonomic is expected to generate 3.43 times less return on investment than Aurora Optoelectronics. But when comparing it to its historical volatility, Loctek Ergonomic Technology is 1.44 times less risky than Aurora Optoelectronics. It trades about 0.13 of its potential returns per unit of risk. Aurora Optoelectronics Co is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 146.00 in Aurora Optoelectronics Co on August 25, 2024 and sell it today you would earn a total of 121.00 from holding Aurora Optoelectronics Co or generate 82.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loctek Ergonomic Technology vs. Aurora Optoelectronics Co
Performance |
| Timeline |
| Loctek Ergonomic Tec |
| Aurora Optoelectronics |
Loctek Ergonomic and Aurora Optoelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loctek Ergonomic and Aurora Optoelectronics
The main advantage of trading using opposite Loctek Ergonomic and Aurora Optoelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loctek Ergonomic 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.| Loctek Ergonomic vs. Xinjiang Baodi Mining | Loctek Ergonomic vs. Minmetals Capital Co | Loctek Ergonomic vs. Tianjin Hi Tech Development | Loctek Ergonomic vs. CITIC Metal Co |
| Aurora Optoelectronics vs. Ming Yang Smart | Aurora Optoelectronics vs. 159681 | Aurora Optoelectronics vs. 159005 | Aurora Optoelectronics vs. Loctek Ergonomic Technology |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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