Correlation Between Aurora Optoelectronics and BOE Technology
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By analyzing existing cross correlation between Aurora Optoelectronics Co and BOE Technology Group, you can compare the effects of market volatilities on Aurora Optoelectronics and BOE Technology 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 Aurora Optoelectronics with a short position of BOE Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Optoelectronics and BOE Technology.
Diversification Opportunities for Aurora Optoelectronics and BOE Technology
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aurora and BOE is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Optoelectronics Co and BOE Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOE Technology Group and Aurora Optoelectronics 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 Aurora Optoelectronics Co are associated (or correlated) with BOE Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOE Technology Group has no effect on the direction of Aurora Optoelectronics i.e., Aurora Optoelectronics and BOE Technology go up and down completely randomly.
Pair Corralation between Aurora Optoelectronics and BOE Technology
Assuming the 90 days trading horizon Aurora Optoelectronics Co is expected to generate 2.1 times more return on investment than BOE Technology. However, Aurora Optoelectronics is 2.1 times more volatile than BOE Technology Group. It trades about 0.01 of its potential returns per unit of risk. BOE Technology Group is currently generating about 0.01 per unit of risk. If you would invest 238.00 in Aurora Optoelectronics Co on October 16, 2024 and sell it today you would lose (23.00) from holding Aurora Optoelectronics Co or give up 9.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurora Optoelectronics Co vs. BOE Technology Group
Performance |
| Timeline |
| Aurora Optoelectronics |
| BOE Technology Group |
Aurora Optoelectronics and BOE Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Optoelectronics and BOE Technology
The main advantage of trading using opposite Aurora Optoelectronics and BOE Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Optoelectronics position performs unexpectedly, BOE Technology 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 BOE Technology will offset losses from the drop in BOE Technology's long position.The idea behind Aurora Optoelectronics Co and BOE Technology Group 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.
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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