Correlation Between AAEON Technology and BizLink Holding
Can any of the company-specific risk be diversified away by investing in both AAEON Technology and BizLink Holding 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 AAEON Technology and BizLink Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAEON Technology and BizLink Holding, you can compare the effects of market volatilities on AAEON Technology and BizLink Holding 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 AAEON Technology with a short position of BizLink Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAEON Technology and BizLink Holding.
Diversification Opportunities for AAEON Technology and BizLink Holding
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AAEON and BizLink is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding AAEON Technology and BizLink Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BizLink Holding and AAEON Technology 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 AAEON Technology are associated (or correlated) with BizLink Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BizLink Holding has no effect on the direction of AAEON Technology i.e., AAEON Technology and BizLink Holding go up and down completely randomly.
Pair Corralation between AAEON Technology and BizLink Holding
Assuming the 90 days trading horizon AAEON Technology is expected to under-perform the BizLink Holding. But the stock apears to be less risky and, when comparing its historical volatility, AAEON Technology is 2.19 times less risky than BizLink Holding. The stock trades about -0.11 of its potential returns per unit of risk. The BizLink Holding is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 47,000 in BizLink Holding on August 29, 2024 and sell it today you would earn a total of 15,000 from holding BizLink Holding or generate 31.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
AAEON Technology vs. BizLink Holding
Performance |
| Timeline |
| AAEON Technology |
| BizLink Holding |
AAEON Technology and BizLink Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAEON Technology and BizLink Holding
The main advantage of trading using opposite AAEON Technology and BizLink Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAEON Technology position performs unexpectedly, BizLink Holding 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 BizLink Holding will offset losses from the drop in BizLink Holding's long position.| AAEON Technology vs. Qisda Corp | AAEON Technology vs. Quanta Computer | AAEON Technology vs. Coretronic | AAEON Technology vs. Wistron Corp |
| BizLink Holding vs. Hota Industrial Mfg | BizLink Holding vs. Chroma ATE | BizLink Holding vs. Sinbon Electronics Co | BizLink Holding vs. Tong Hsing Electronic |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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