Correlation Between Aurora Optoelectronics and Wuhan Yangtze
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By analyzing existing cross correlation between Aurora Optoelectronics Co and Wuhan Yangtze Communication, you can compare the effects of market volatilities on Aurora Optoelectronics and Wuhan Yangtze 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 Wuhan Yangtze. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Optoelectronics and Wuhan Yangtze.
Diversification Opportunities for Aurora Optoelectronics and Wuhan Yangtze
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aurora and Wuhan is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Optoelectronics Co and Wuhan Yangtze Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuhan Yangtze Commun 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 Wuhan Yangtze. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuhan Yangtze Commun has no effect on the direction of Aurora Optoelectronics i.e., Aurora Optoelectronics and Wuhan Yangtze go up and down completely randomly.
Pair Corralation between Aurora Optoelectronics and Wuhan Yangtze
Assuming the 90 days trading horizon Aurora Optoelectronics is expected to generate 1.15 times less return on investment than Wuhan Yangtze. In addition to that, Aurora Optoelectronics is 1.01 times more volatile than Wuhan Yangtze Communication. It trades about 0.23 of its total potential returns per unit of risk. Wuhan Yangtze Communication is currently generating about 0.27 per unit of volatility. If you would invest 1,511 in Wuhan Yangtze Communication on September 2, 2024 and sell it today you would earn a total of 1,458 from holding Wuhan Yangtze Communication or generate 96.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurora Optoelectronics Co vs. Wuhan Yangtze Communication
Performance |
| Timeline |
| Aurora Optoelectronics |
| Wuhan Yangtze Commun |
Aurora Optoelectronics and Wuhan Yangtze Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Optoelectronics and Wuhan Yangtze
The main advantage of trading using opposite Aurora Optoelectronics and Wuhan Yangtze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Optoelectronics position performs unexpectedly, Wuhan Yangtze 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 Wuhan Yangtze will offset losses from the drop in Wuhan Yangtze's long position.| Aurora Optoelectronics vs. Zotye Automobile Co | Aurora Optoelectronics vs. Guangzhou Haige Communications | Aurora Optoelectronics vs. Gan Yuan Foods | Aurora Optoelectronics vs. Anhui Jianghuai Automobile |
| Wuhan Yangtze vs. Industrial and Commercial | Wuhan Yangtze vs. Kweichow Moutai Co | Wuhan Yangtze vs. Agricultural Bank of | Wuhan Yangtze vs. China Mobile Limited |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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