Correlation Between Aurora Optoelectronics and Nantong Haixing
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By analyzing existing cross correlation between Aurora Optoelectronics Co and Nantong Haixing Electronics, you can compare the effects of market volatilities on Aurora Optoelectronics and Nantong Haixing 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 Nantong Haixing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Optoelectronics and Nantong Haixing.
Diversification Opportunities for Aurora Optoelectronics and Nantong Haixing
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aurora and Nantong is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Optoelectronics Co and Nantong Haixing Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nantong Haixing Elec 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 Nantong Haixing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nantong Haixing Elec has no effect on the direction of Aurora Optoelectronics i.e., Aurora Optoelectronics and Nantong Haixing go up and down completely randomly.
Pair Corralation between Aurora Optoelectronics and Nantong Haixing
Assuming the 90 days trading horizon Aurora Optoelectronics Co is expected to generate 1.47 times more return on investment than Nantong Haixing. However, Aurora Optoelectronics is 1.47 times more volatile than Nantong Haixing Electronics. It trades about 0.02 of its potential returns per unit of risk. Nantong Haixing Electronics is currently generating about 0.0 per unit of risk. If you would invest 294.00 in Aurora Optoelectronics Co on November 28, 2024 and sell it today you would earn a total of 10.00 from holding Aurora Optoelectronics Co or generate 3.4% 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. Nantong Haixing Electronics
Performance |
| Timeline |
| Aurora Optoelectronics |
| Nantong Haixing Elec |
Aurora Optoelectronics and Nantong Haixing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Optoelectronics and Nantong Haixing
The main advantage of trading using opposite Aurora Optoelectronics and Nantong Haixing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Optoelectronics position performs unexpectedly, Nantong Haixing 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 Nantong Haixing will offset losses from the drop in Nantong Haixing's long position.| Aurora Optoelectronics vs. Beijing Sanyuan Foods | Aurora Optoelectronics vs. Shanghai Ziyan Foods | Aurora Optoelectronics vs. Huaibei Mining Holdings | Aurora Optoelectronics vs. HaiXin Foods Co |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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