Correlation Between AAEON Technology and Coretronic
Can any of the company-specific risk be diversified away by investing in both AAEON Technology and Coretronic 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 Coretronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAEON Technology and Coretronic, you can compare the effects of market volatilities on AAEON Technology and Coretronic 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 Coretronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAEON Technology and Coretronic.
Diversification Opportunities for AAEON Technology and Coretronic
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AAEON and Coretronic is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding AAEON Technology and Coretronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coretronic 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 Coretronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coretronic has no effect on the direction of AAEON Technology i.e., AAEON Technology and Coretronic go up and down completely randomly.
Pair Corralation between AAEON Technology and Coretronic
Assuming the 90 days trading horizon AAEON Technology is expected to under-perform the Coretronic. But the stock apears to be less risky and, when comparing its historical volatility, AAEON Technology is 1.8 times less risky than Coretronic. The stock trades about -0.12 of its potential returns per unit of risk. The Coretronic is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 6,930 in Coretronic on September 1, 2024 and sell it today you would earn a total of 830.00 from holding Coretronic or generate 11.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
AAEON Technology vs. Coretronic
Performance |
| Timeline |
| AAEON Technology |
| Coretronic |
AAEON Technology and Coretronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAEON Technology and Coretronic
The main advantage of trading using opposite AAEON Technology and Coretronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAEON Technology position performs unexpectedly, Coretronic 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 Coretronic will offset losses from the drop in Coretronic's long position.| AAEON Technology vs. Quanta Computer | AAEON Technology vs. Wiwynn Corp | AAEON Technology vs. Getac Technology Corp | AAEON Technology vs. InnoDisk |
| Coretronic vs. Qisda Corp | Coretronic vs. AU Optronics | Coretronic vs. Vanguard International Semiconductor | Coretronic vs. Lite On Technology Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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