Correlation Between Aiptek International and Para Light
Can any of the company-specific risk be diversified away by investing in both Aiptek International and Para Light at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Aiptek International and Para Light into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aiptek International and Para Light Electronics, you can compare the effects of market volatilities on Aiptek International and Para Light 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 Aiptek International with a short position of Para Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aiptek International and Para Light.
Diversification Opportunities for Aiptek International and Para Light
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aiptek and Para is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Aiptek International and Para Light Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Para Light Electronics and Aiptek International 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 Aiptek International are associated (or correlated) with Para Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Para Light Electronics has no effect on the direction of Aiptek International i.e., Aiptek International and Para Light go up and down completely randomly.
Pair Corralation between Aiptek International and Para Light
Assuming the 90 days trading horizon Aiptek International is expected to generate 1.82 times more return on investment than Para Light. However, Aiptek International is 1.82 times more volatile than Para Light Electronics. It trades about 0.05 of its potential returns per unit of risk. Para Light Electronics is currently generating about -0.01 per unit of risk. If you would invest 979.00 in Aiptek International on August 30, 2024 and sell it today you would earn a total of 641.00 from holding Aiptek International or generate 65.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aiptek International vs. Para Light Electronics
Performance |
| Timeline |
| Aiptek International |
| Para Light Electronics |
Aiptek International and Para Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aiptek International and Para Light
The main advantage of trading using opposite Aiptek International and Para Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aiptek International position performs unexpectedly, Para Light 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 Para Light will offset losses from the drop in Para Light's long position.| Aiptek International vs. Kinko Optical Co | Aiptek International vs. Altek Corp | Aiptek International vs. Harvatek Corp | Aiptek International vs. Asia Optical Co |
| Para Light vs. Harvatek Corp | Para Light vs. Bright Led Electronics | Para Light vs. Ledtech Electronics Corp | Para Light vs. Everlight Electronics Co |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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