Correlation Between Aurelius Technologies and IOI Bhd
Can any of the company-specific risk be diversified away by investing in both Aurelius Technologies and IOI Bhd 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 Aurelius Technologies and IOI Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurelius Technologies Bhd and IOI Bhd, you can compare the effects of market volatilities on Aurelius Technologies and IOI Bhd 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 Aurelius Technologies with a short position of IOI Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurelius Technologies and IOI Bhd.
Diversification Opportunities for Aurelius Technologies and IOI Bhd
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aurelius and IOI is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Aurelius Technologies Bhd and IOI Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IOI Bhd and Aurelius Technologies 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 Aurelius Technologies Bhd are associated (or correlated) with IOI Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IOI Bhd has no effect on the direction of Aurelius Technologies i.e., Aurelius Technologies and IOI Bhd go up and down completely randomly.
Pair Corralation between Aurelius Technologies and IOI Bhd
Assuming the 90 days trading horizon Aurelius Technologies Bhd is expected to generate 2.06 times more return on investment than IOI Bhd. However, Aurelius Technologies is 2.06 times more volatile than IOI Bhd. It trades about 0.15 of its potential returns per unit of risk. IOI Bhd is currently generating about -0.08 per unit of risk. If you would invest 279.00 in Aurelius Technologies Bhd on September 5, 2024 and sell it today you would earn a total of 22.00 from holding Aurelius Technologies Bhd or generate 7.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurelius Technologies Bhd vs. IOI Bhd
Performance |
| Timeline |
| Aurelius Technologies Bhd |
| IOI Bhd |
Aurelius Technologies and IOI Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurelius Technologies and IOI Bhd
The main advantage of trading using opposite Aurelius Technologies and IOI Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurelius Technologies position performs unexpectedly, IOI Bhd 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 IOI Bhd will offset losses from the drop in IOI Bhd's long position.| Aurelius Technologies vs. Dnonce Tech Bhd | Aurelius Technologies vs. Pantech Group Holdings | Aurelius Technologies vs. Minetech Resources Bhd | Aurelius Technologies vs. HeiTech Padu Bhd |
| IOI Bhd vs. Riverview Rubber Estates | IOI Bhd vs. PMB Technology Bhd | IOI Bhd vs. Awanbiru Technology Bhd | IOI Bhd vs. Datasonic Group Bhd |
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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