Correlation Between Chuangs China and AOI Electronics
Can any of the company-specific risk be diversified away by investing in both Chuangs China 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 Chuangs China and AOI Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chuangs China Investments and AOI Electronics Co, you can compare the effects of market volatilities on Chuangs China 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 Chuangs China with a short position of AOI Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and AOI Electronics.
Diversification Opportunities for Chuangs China and AOI Electronics
-1.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chuangs and AOI is -1.0. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments and AOI Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AOI Electronics and Chuangs China 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 Chuangs China Investments 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 Chuangs China i.e., Chuangs China and AOI Electronics go up and down completely randomly.
Pair Corralation between Chuangs China and AOI Electronics
If you would invest 1,868 in AOI Electronics Co on November 28, 2024 and sell it today you would earn a total of 0.00 from holding AOI Electronics Co or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chuangs China Investments vs. AOI Electronics Co
Performance |
| Timeline |
| Chuangs China Investments |
| AOI Electronics |
Chuangs China and AOI Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and AOI Electronics
The main advantage of trading using opposite Chuangs China and AOI Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China 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.| Chuangs China vs. Daito Trust Construction | Chuangs China vs. Hanison Construction Holdings | Chuangs China vs. Penta Ocean Construction Co | Chuangs China vs. Corsair Gaming |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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