Correlation Between Bonso Electronics and AERWINS Technologies
Can any of the company-specific risk be diversified away by investing in both Bonso Electronics and AERWINS Technologies 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 Bonso Electronics and AERWINS Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bonso Electronics International and AERWINS Technologies, you can compare the effects of market volatilities on Bonso Electronics and AERWINS Technologies 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 Bonso Electronics with a short position of AERWINS Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bonso Electronics and AERWINS Technologies.
Diversification Opportunities for Bonso Electronics and AERWINS Technologies
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bonso and AERWINS is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Bonso Electronics Internationa and AERWINS Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AERWINS Technologies and Bonso Electronics 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 Bonso Electronics International are associated (or correlated) with AERWINS Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AERWINS Technologies has no effect on the direction of Bonso Electronics i.e., Bonso Electronics and AERWINS Technologies go up and down completely randomly.
Pair Corralation between Bonso Electronics and AERWINS Technologies
Given the investment horizon of 90 days Bonso Electronics is expected to generate 1.71 times less return on investment than AERWINS Technologies. But when comparing it to its historical volatility, Bonso Electronics International is 1.42 times less risky than AERWINS Technologies. It trades about 0.08 of its potential returns per unit of risk. AERWINS Technologies is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2.91 in AERWINS Technologies on August 27, 2024 and sell it today you would lose (2.33) from holding AERWINS Technologies or give up 80.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 13.39% |
| Values | Daily Returns |
Bonso Electronics Internationa vs. AERWINS Technologies
Performance |
| Timeline |
| Bonso Electronics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| AERWINS Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bonso Electronics and AERWINS Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bonso Electronics and AERWINS Technologies
The main advantage of trading using opposite Bonso Electronics and AERWINS Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bonso Electronics position performs unexpectedly, AERWINS Technologies 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 AERWINS Technologies will offset losses from the drop in AERWINS Technologies' long position.| Bonso Electronics vs. Cepton Inc | Bonso Electronics vs. SaverOne 2014 Ltd | Bonso Electronics vs. Genasys | Bonso Electronics vs. Kraken Robotics |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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