Correlation Between AOPEN and Asia Optical
Can any of the company-specific risk be diversified away by investing in both AOPEN and Asia Optical 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 Asia Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AOPEN Inc and Asia Optical Co, you can compare the effects of market volatilities on AOPEN and Asia Optical 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 Asia Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of AOPEN and Asia Optical.
Diversification Opportunities for AOPEN and Asia Optical
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AOPEN and Asia is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding AOPEN Inc and Asia Optical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Optical 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 Asia Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Optical has no effect on the direction of AOPEN i.e., AOPEN and Asia Optical go up and down completely randomly.
Pair Corralation between AOPEN and Asia Optical
Assuming the 90 days trading horizon AOPEN Inc is expected to under-perform the Asia Optical. But the stock apears to be less risky and, when comparing its historical volatility, AOPEN Inc is 2.49 times less risky than Asia Optical. The stock trades about -0.12 of its potential returns per unit of risk. The Asia Optical Co is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 16,850 in Asia Optical Co on October 24, 2024 and sell it today you would lose (700.00) from holding Asia Optical Co or give up 4.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AOPEN Inc vs. Asia Optical Co
Performance |
| Timeline |
| AOPEN Inc |
| Asia Optical |
AOPEN and Asia Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AOPEN and Asia Optical
The main advantage of trading using opposite AOPEN and Asia Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AOPEN position performs unexpectedly, Asia Optical 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 Asia Optical will offset losses from the drop in Asia Optical's long position.| AOPEN vs. Elite Semiconductor Memory | AOPEN vs. Tripod Technology Corp | AOPEN vs. Chenming Mold Industrial | AOPEN vs. Asia Optical Co |
| Asia Optical vs. LARGAN Precision Co | Asia Optical vs. Novatek Microelectronics Corp | Asia Optical vs. Genius Electronic Optical | Asia Optical vs. Catcher 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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