Correlation Between AOI Electronics and MUTUIONLINE
Can any of the company-specific risk be diversified away by investing in both AOI Electronics and MUTUIONLINE 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 MUTUIONLINE 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 MUTUIONLINE, you can compare the effects of market volatilities on AOI Electronics and MUTUIONLINE 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 MUTUIONLINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of AOI Electronics and MUTUIONLINE.
Diversification Opportunities for AOI Electronics and MUTUIONLINE
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AOI and MUTUIONLINE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AOI Electronics Co and MUTUIONLINE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MUTUIONLINE 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 MUTUIONLINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MUTUIONLINE has no effect on the direction of AOI Electronics i.e., AOI Electronics and MUTUIONLINE go up and down completely randomly.
Pair Corralation between AOI Electronics and MUTUIONLINE
If you would invest 2,829 in MUTUIONLINE on October 5, 2024 and sell it today you would earn a total of 816.00 from holding MUTUIONLINE or generate 28.84% 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. MUTUIONLINE
Performance |
Timeline |
AOI Electronics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
MUTUIONLINE |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
AOI Electronics and MUTUIONLINE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AOI Electronics and MUTUIONLINE
The main advantage of trading using opposite AOI Electronics and MUTUIONLINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AOI Electronics position performs unexpectedly, MUTUIONLINE 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 MUTUIONLINE will offset losses from the drop in MUTUIONLINE's long position.The idea behind AOI Electronics Co and MUTUIONLINE 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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