Correlation Between AOI Electronics and Beijing MediaLimited
Can any of the company-specific risk be diversified away by investing in both AOI Electronics and Beijing MediaLimited 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 Beijing MediaLimited 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 Beijing Media, you can compare the effects of market volatilities on AOI Electronics and Beijing MediaLimited 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 Beijing MediaLimited. Check out your portfolio center. Please also check ongoing floating volatility patterns of AOI Electronics and Beijing MediaLimited.
Diversification Opportunities for AOI Electronics and Beijing MediaLimited
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AOI and Beijing is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AOI Electronics Co and Beijing Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing MediaLimited 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 Beijing MediaLimited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing MediaLimited has no effect on the direction of AOI Electronics i.e., AOI Electronics and Beijing MediaLimited go up and down completely randomly.
Pair Corralation between AOI Electronics and Beijing MediaLimited
If you would invest 5.30 in Beijing Media on August 28, 2024 and sell it today you would lose (1.70) from holding Beijing Media or give up 32.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AOI Electronics Co vs. Beijing Media
Performance |
| Timeline |
| AOI Electronics |
| Beijing MediaLimited |
AOI Electronics and Beijing MediaLimited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AOI Electronics and Beijing MediaLimited
The main advantage of trading using opposite AOI Electronics and Beijing MediaLimited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AOI Electronics position performs unexpectedly, Beijing MediaLimited 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 Beijing MediaLimited will offset losses from the drop in Beijing MediaLimited's long position.| AOI Electronics vs. NVIDIA | AOI Electronics vs. NVIDIA | AOI Electronics vs. QUALCOMM Incorporated | AOI Electronics vs. Intel |
| Beijing MediaLimited vs. The Interpublic Group | Beijing MediaLimited vs. Superior Plus Corp | Beijing MediaLimited vs. NMI Holdings | Beijing MediaLimited vs. Origin Agritech |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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