Correlation Between AOPEN and Ji Haw
Can any of the company-specific risk be diversified away by investing in both AOPEN and Ji Haw at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining AOPEN and Ji Haw into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AOPEN Inc and Ji Haw Industrial Co, you can compare the effects of market volatilities on AOPEN and Ji Haw 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 AOPEN with a short position of Ji Haw. Check out your portfolio center. Please also check ongoing floating volatility patterns of AOPEN and Ji Haw.
Diversification Opportunities for AOPEN and Ji Haw
Very poor diversification
The 3 months correlation between AOPEN and 3011 is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding AOPEN Inc and Ji Haw Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ji Haw Industrial and AOPEN 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 AOPEN Inc are associated (or correlated) with Ji Haw. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ji Haw Industrial has no effect on the direction of AOPEN i.e., AOPEN and Ji Haw go up and down completely randomly.
Pair Corralation between AOPEN and Ji Haw
Assuming the 90 days trading horizon AOPEN Inc is expected to generate 0.81 times more return on investment than Ji Haw. However, AOPEN Inc is 1.23 times less risky than Ji Haw. It trades about -0.16 of its potential returns per unit of risk. Ji Haw Industrial Co is currently generating about -0.38 per unit of risk. If you would invest 4,885 in AOPEN Inc on November 3, 2024 and sell it today you would lose (240.00) from holding AOPEN Inc or give up 4.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AOPEN Inc vs. Ji Haw Industrial Co
Performance |
| Timeline |
| AOPEN Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ji Haw Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
AOPEN and Ji Haw Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AOPEN and Ji Haw
The main advantage of trading using opposite AOPEN and Ji Haw positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AOPEN position performs unexpectedly, Ji Haw 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 Ji Haw will offset losses from the drop in Ji Haw's long position.The idea behind AOPEN Inc and Ji Haw Industrial 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.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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