Correlation Between Aurora Optoelectronics and Dow Jones
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By analyzing existing cross correlation between Aurora Optoelectronics Co and Dow Jones Industrial, you can compare the effects of market volatilities on Aurora Optoelectronics and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Optoelectronics and Dow Jones.
Diversification Opportunities for Aurora Optoelectronics and Dow Jones
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aurora and Dow is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Optoelectronics Co and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Aurora Optoelectronics i.e., Aurora Optoelectronics and Dow Jones go up and down completely randomly.
Pair Corralation between Aurora Optoelectronics and Dow Jones
Assuming the 90 days trading horizon Aurora Optoelectronics Co is expected to generate 4.51 times more return on investment than Dow Jones. However, Aurora Optoelectronics is 4.51 times more volatile than Dow Jones Industrial. It trades about 0.04 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.1 per unit of risk. If you would invest 215.00 in Aurora Optoelectronics Co on August 26, 2024 and sell it today you would earn a total of 52.00 from holding Aurora Optoelectronics Co or generate 24.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.5% |
| Values | Daily Returns |
Aurora Optoelectronics Co vs. Dow Jones Industrial
Performance |
| Timeline |
Aurora Optoelectronics and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Aurora Optoelectronics Co
Pair trading matchups for Aurora Optoelectronics
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Aurora Optoelectronics and Dow Jones
The main advantage of trading using opposite Aurora Optoelectronics and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Optoelectronics position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Aurora Optoelectronics vs. Ming Yang Smart | Aurora Optoelectronics vs. 159681 | Aurora Optoelectronics vs. 159005 | Aurora Optoelectronics vs. Loctek Ergonomic Technology |
| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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