Correlation Between Cadence Design and AOI Electronics

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Can any of the company-specific risk be diversified away by investing in both Cadence Design 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 Cadence Design and AOI Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cadence Design Systems and AOI Electronics Co, you can compare the effects of market volatilities on Cadence Design 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 Cadence Design with a short position of AOI Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cadence Design and AOI Electronics.

Diversification Opportunities for Cadence Design and AOI Electronics

CadenceAOIDiversified AwayCadenceAOIDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Cadence and AOI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cadence Design Systems and AOI Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AOI Electronics and Cadence Design 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 Cadence Design Systems 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 Cadence Design i.e., Cadence Design and AOI Electronics go up and down completely randomly.

Pair Corralation between Cadence Design and AOI Electronics

If you would invest  23,415  in Cadence Design Systems on October 20, 2024 and sell it today you would earn a total of  6,225  from holding Cadence Design Systems or generate 26.59% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Cadence Design Systems  vs.  AOI Electronics Co

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -10-5051015
JavaScript chart by amCharts 3.21.15CDS OIA
       Timeline  
Cadence Design Systems 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Cadence Design Systems are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Cadence Design reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan230240250260270280290300
AOI Electronics 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days AOI Electronics Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, AOI Electronics is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1919.5

Cadence Design and AOI Electronics Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.19-4.64-3.08-1.530.02591.623.264.916.56 0.020.040.060.080.10
JavaScript chart by amCharts 3.21.15CDS OIA
       Returns  

Pair Trading with Cadence Design and AOI Electronics

The main advantage of trading using opposite Cadence Design and AOI Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cadence Design 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.
The idea behind Cadence Design Systems and AOI Electronics Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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