Correlation Between Aurora Optoelectronics and JuneYao Dairy
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By analyzing existing cross correlation between Aurora Optoelectronics Co and JuneYao Dairy Co, you can compare the effects of market volatilities on Aurora Optoelectronics and JuneYao Dairy 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 JuneYao Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Optoelectronics and JuneYao Dairy.
Diversification Opportunities for Aurora Optoelectronics and JuneYao Dairy
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aurora and JuneYao is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Optoelectronics Co and JuneYao Dairy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JuneYao Dairy 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 JuneYao Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JuneYao Dairy has no effect on the direction of Aurora Optoelectronics i.e., Aurora Optoelectronics and JuneYao Dairy go up and down completely randomly.
Pair Corralation between Aurora Optoelectronics and JuneYao Dairy
Assuming the 90 days trading horizon Aurora Optoelectronics Co is expected to generate 1.27 times more return on investment than JuneYao Dairy. However, Aurora Optoelectronics is 1.27 times more volatile than JuneYao Dairy Co. It trades about 0.01 of its potential returns per unit of risk. JuneYao Dairy Co is currently generating about -0.05 per unit of risk. If you would invest 238.00 in Aurora Optoelectronics Co on October 16, 2024 and sell it today you would lose (23.00) from holding Aurora Optoelectronics Co or give up 9.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurora Optoelectronics Co vs. JuneYao Dairy Co
Performance |
| Timeline |
| Aurora Optoelectronics |
| JuneYao Dairy |
Aurora Optoelectronics and JuneYao Dairy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Optoelectronics and JuneYao Dairy
The main advantage of trading using opposite Aurora Optoelectronics and JuneYao Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Optoelectronics position performs unexpectedly, JuneYao Dairy 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 JuneYao Dairy will offset losses from the drop in JuneYao Dairy's long position.The idea behind Aurora Optoelectronics Co and JuneYao Dairy Co 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.
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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