Correlation Between Aurora Optoelectronics and Ningbo Ligong
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By analyzing existing cross correlation between Aurora Optoelectronics Co and Ningbo Ligong Online, you can compare the effects of market volatilities on Aurora Optoelectronics and Ningbo Ligong 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 Ningbo Ligong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Optoelectronics and Ningbo Ligong.
Diversification Opportunities for Aurora Optoelectronics and Ningbo Ligong
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aurora and Ningbo is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Optoelectronics Co and Ningbo Ligong Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Ligong Online 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 Ningbo Ligong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Ligong Online has no effect on the direction of Aurora Optoelectronics i.e., Aurora Optoelectronics and Ningbo Ligong go up and down completely randomly.
Pair Corralation between Aurora Optoelectronics and Ningbo Ligong
Assuming the 90 days trading horizon Aurora Optoelectronics Co is expected to generate 2.88 times more return on investment than Ningbo Ligong. However, Aurora Optoelectronics is 2.88 times more volatile than Ningbo Ligong Online. It trades about 0.41 of its potential returns per unit of risk. Ningbo Ligong Online is currently generating about 0.25 per unit of risk. If you would invest 225.00 in Aurora Optoelectronics Co on November 29, 2024 and sell it today you would earn a total of 81.00 from holding Aurora Optoelectronics Co or generate 36.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurora Optoelectronics Co vs. Ningbo Ligong Online
Performance |
| Timeline |
| Aurora Optoelectronics |
| Ningbo Ligong Online |
Aurora Optoelectronics and Ningbo Ligong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Optoelectronics and Ningbo Ligong
The main advantage of trading using opposite Aurora Optoelectronics and Ningbo Ligong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Optoelectronics position performs unexpectedly, Ningbo Ligong 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 Ningbo Ligong will offset losses from the drop in Ningbo Ligong's long position.| Aurora Optoelectronics vs. AVCON Information Tech | Aurora Optoelectronics vs. Guangzhou Dongfang Hotel | Aurora Optoelectronics vs. SSAW Hotels Resorts | Aurora Optoelectronics vs. Shenzhen SDG Information |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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