Correlation Between AOI Electronics and Microsoft
Can any of the company-specific risk be diversified away by investing in both AOI Electronics and Microsoft 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 Microsoft 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 Microsoft, you can compare the effects of market volatilities on AOI Electronics and Microsoft 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 Microsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of AOI Electronics and Microsoft.
Diversification Opportunities for AOI Electronics and Microsoft
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AOI and Microsoft is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AOI Electronics Co and Microsoft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft 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 Microsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microsoft has no effect on the direction of AOI Electronics i.e., AOI Electronics and Microsoft go up and down completely randomly.
Pair Corralation between AOI Electronics and Microsoft
If you would invest 1,868 in AOI Electronics Co on November 4, 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 | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
AOI Electronics Co vs. Microsoft
Performance |
| Timeline |
| AOI Electronics |
| Microsoft |
AOI Electronics and Microsoft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AOI Electronics and Microsoft
The main advantage of trading using opposite AOI Electronics and Microsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AOI Electronics position performs unexpectedly, Microsoft 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 Microsoft will offset losses from the drop in Microsoft's long position.| AOI Electronics vs. CHINA SOUTHN AIR H | AOI Electronics vs. AIR LIQUIDE ADR | AOI Electronics vs. Spirent Communications plc | AOI Electronics vs. Chunghwa Telecom Co |
| Microsoft vs. SHIP HEALTHCARE HLDGINC | Microsoft vs. CLOVER HEALTH INV | Microsoft vs. WESANA HEALTH HOLD | Microsoft vs. PURETECH HEALTH PLC |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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