Correlation Between AOI Electronics and New Residential
Can any of the company-specific risk be diversified away by investing in both AOI Electronics and New Residential 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 AOI Electronics and New Residential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AOI Electronics Co and New Residential Investment, you can compare the effects of market volatilities on AOI Electronics and New Residential 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 AOI Electronics with a short position of New Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of AOI Electronics and New Residential.
Diversification Opportunities for AOI Electronics and New Residential
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AOI and New is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AOI Electronics Co and New Residential Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Residential Inve and AOI 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 AOI Electronics Co are associated (or correlated) with New Residential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Residential Inve has no effect on the direction of AOI Electronics i.e., AOI Electronics and New Residential go up and down completely randomly.
Pair Corralation between AOI Electronics and New Residential
If you would invest 956.00 in New Residential Investment on September 3, 2024 and sell it today you would earn a total of 102.00 from holding New Residential Investment or generate 10.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
AOI Electronics Co vs. New Residential Investment
Performance |
| Timeline |
| AOI Electronics |
| New Residential Inve |
AOI Electronics and New Residential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AOI Electronics and New Residential
The main advantage of trading using opposite AOI Electronics and New Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AOI Electronics position performs unexpectedly, New Residential 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 New Residential will offset losses from the drop in New Residential's long position.| AOI Electronics vs. Check Point Software | AOI Electronics vs. Unity Software | AOI Electronics vs. Guidewire Software | AOI Electronics vs. Alfa Financial Software |
| New Residential vs. Richardson Electronics | New Residential vs. Clean Energy Fuels | New Residential vs. Renesas Electronics | New Residential vs. METHODE ELECTRONICS |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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