Correlation Between AOI Electronics and INSURANCE AUST
Can any of the company-specific risk be diversified away by investing in both AOI Electronics and INSURANCE AUST 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 INSURANCE AUST 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 INSURANCE AUST GRP, you can compare the effects of market volatilities on AOI Electronics and INSURANCE AUST 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 INSURANCE AUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of AOI Electronics and INSURANCE AUST.
Diversification Opportunities for AOI Electronics and INSURANCE AUST
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AOI and INSURANCE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AOI Electronics Co and INSURANCE AUST GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INSURANCE AUST GRP 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 INSURANCE AUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INSURANCE AUST GRP has no effect on the direction of AOI Electronics i.e., AOI Electronics and INSURANCE AUST go up and down completely randomly.
Pair Corralation between AOI Electronics and INSURANCE AUST
If you would invest 448.00 in INSURANCE AUST GRP on August 30, 2024 and sell it today you would earn a total of 67.00 from holding INSURANCE AUST GRP or generate 14.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AOI Electronics Co vs. INSURANCE AUST GRP
Performance |
| Timeline |
| AOI Electronics |
| INSURANCE AUST GRP |
AOI Electronics and INSURANCE AUST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AOI Electronics and INSURANCE AUST
The main advantage of trading using opposite AOI Electronics and INSURANCE AUST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AOI Electronics position performs unexpectedly, INSURANCE AUST 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 INSURANCE AUST will offset losses from the drop in INSURANCE AUST's long position.| AOI Electronics vs. DIVERSIFIED ROYALTY | AOI Electronics vs. CDL INVESTMENT | AOI Electronics vs. Chuangs China Investments | AOI Electronics vs. Fast Retailing Co |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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