Correlation Between Aurora Optoelectronics and Jiangxi Lianchuang
Specify exactly 2 symbols:
By analyzing existing cross correlation between Aurora Optoelectronics Co and Jiangxi Lianchuang Opto electronic, you can compare the effects of market volatilities on Aurora Optoelectronics and Jiangxi Lianchuang 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 Jiangxi Lianchuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Optoelectronics and Jiangxi Lianchuang.
Diversification Opportunities for Aurora Optoelectronics and Jiangxi Lianchuang
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aurora and Jiangxi is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Optoelectronics Co and Jiangxi Lianchuang Opto electr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Lianchuang Opto 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 Jiangxi Lianchuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Lianchuang Opto has no effect on the direction of Aurora Optoelectronics i.e., Aurora Optoelectronics and Jiangxi Lianchuang go up and down completely randomly.
Pair Corralation between Aurora Optoelectronics and Jiangxi Lianchuang
Assuming the 90 days trading horizon Aurora Optoelectronics is expected to generate 2.89 times less return on investment than Jiangxi Lianchuang. In addition to that, Aurora Optoelectronics is 1.14 times more volatile than Jiangxi Lianchuang Opto electronic. It trades about 0.02 of its total potential returns per unit of risk. Jiangxi Lianchuang Opto electronic is currently generating about 0.05 per unit of volatility. If you would invest 2,596 in Jiangxi Lianchuang Opto electronic on October 19, 2024 and sell it today you would earn a total of 1,998 from holding Jiangxi Lianchuang Opto electronic or generate 76.96% 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. Jiangxi Lianchuang Opto electr
Performance |
| Timeline |
| Aurora Optoelectronics |
| Jiangxi Lianchuang Opto |
Aurora Optoelectronics and Jiangxi Lianchuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Optoelectronics and Jiangxi Lianchuang
The main advantage of trading using opposite Aurora Optoelectronics and Jiangxi Lianchuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Optoelectronics position performs unexpectedly, Jiangxi Lianchuang 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 Jiangxi Lianchuang will offset losses from the drop in Jiangxi Lianchuang's long position.The idea behind Aurora Optoelectronics Co and Jiangxi Lianchuang Opto electronic 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.
| Jiangxi Lianchuang vs. Haima Automobile Group | Jiangxi Lianchuang vs. Hangzhou Gisway Information | Jiangxi Lianchuang vs. Anhui Jianghuai Automobile | Jiangxi Lianchuang vs. Longmaster Information Tech |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |