Correlation Between Advanced Micro and AOI Electronics
Can any of the company-specific risk be diversified away by investing in both Advanced Micro and AOI Electronics 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 Advanced Micro and AOI Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Micro Devices and AOI Electronics Co, you can compare the effects of market volatilities on Advanced Micro and AOI Electronics 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 Advanced Micro with a short position of AOI Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Micro and AOI Electronics.
Diversification Opportunities for Advanced Micro and AOI Electronics
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Advanced and AOI is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices and AOI Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AOI Electronics and Advanced Micro 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 Advanced Micro Devices are associated (or correlated) with AOI Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AOI Electronics has no effect on the direction of Advanced Micro i.e., Advanced Micro and AOI Electronics go up and down completely randomly.
Pair Corralation between Advanced Micro and AOI Electronics
Assuming the 90 days trading horizon Advanced Micro Devices is expected to under-perform the AOI Electronics. In addition to that, Advanced Micro is 19.69 times more volatile than AOI Electronics Co. It trades about -0.35 of its total potential returns per unit of risk. AOI Electronics Co is currently generating about 0.22 per unit of volatility. If you would invest 1,850 in AOI Electronics Co on January 21, 2025 and sell it today you would earn a total of 18.00 from holding AOI Electronics Co or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Micro Devices vs. AOI Electronics Co
Performance |
| Timeline |
| Advanced Micro Devices |
| AOI Electronics |
Advanced Micro and AOI Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Micro and AOI Electronics
The main advantage of trading using opposite Advanced Micro and AOI Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Micro position performs unexpectedly, AOI Electronics 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 AOI Electronics will offset losses from the drop in AOI Electronics' long position.| Advanced Micro vs. NAGOYA RAILROAD | Advanced Micro vs. Computer And Technologies | Advanced Micro vs. SBA Communications Corp | Advanced Micro vs. TEXAS ROADHOUSE |
| AOI Electronics vs. NVIDIA | AOI Electronics vs. NVIDIA | AOI Electronics vs. Taiwan Semiconductor Manufacturing | AOI Electronics vs. Texas Instruments Incorporated |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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