Correlation Between Aurora Optoelectronics and North Copper
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By analyzing existing cross correlation between Aurora Optoelectronics Co and North Copper Shanxi, you can compare the effects of market volatilities on Aurora Optoelectronics and North Copper 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 North Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Optoelectronics and North Copper.
Diversification Opportunities for Aurora Optoelectronics and North Copper
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aurora and North is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Optoelectronics Co and North Copper Shanxi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Copper Shanxi 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 North Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Copper Shanxi has no effect on the direction of Aurora Optoelectronics i.e., Aurora Optoelectronics and North Copper go up and down completely randomly.
Pair Corralation between Aurora Optoelectronics and North Copper
Assuming the 90 days trading horizon Aurora Optoelectronics Co is expected to under-perform the North Copper. But the stock apears to be less risky and, when comparing its historical volatility, Aurora Optoelectronics Co is 1.21 times less risky than North Copper. The stock trades about -0.05 of its potential returns per unit of risk. The North Copper Shanxi is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 873.00 in North Copper Shanxi on November 8, 2024 and sell it today you would earn a total of 79.00 from holding North Copper Shanxi or generate 9.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurora Optoelectronics Co vs. North Copper Shanxi
Performance |
| Timeline |
| Aurora Optoelectronics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| North Copper Shanxi |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Aurora Optoelectronics and North Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Optoelectronics and North Copper
The main advantage of trading using opposite Aurora Optoelectronics and North Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Optoelectronics position performs unexpectedly, North Copper 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 North Copper will offset losses from the drop in North Copper's long position.The idea behind Aurora Optoelectronics Co and North Copper Shanxi 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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