Correlation Between AOI Electronics and CLEAN ENERGY

Can any of the company-specific risk be diversified away by investing in both AOI Electronics and CLEAN ENERGY 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 CLEAN ENERGY 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 CLEAN ENERGY FUELS, you can compare the effects of market volatilities on AOI Electronics and CLEAN ENERGY 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 CLEAN ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of AOI Electronics and CLEAN ENERGY.

Diversification Opportunities for AOI Electronics and CLEAN ENERGY

0.0

Correlation Coefficient

AOI Electronics  CLEAN ENERGY

Pay attention - limited upside

The 3 months correlation between AOI and CLEAN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AOI Electronics Co and CLEAN ENERGY FUELS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLEAN ENERGY FUELS 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 CLEAN ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLEAN ENERGY FUELS has no effect on the direction of AOI Electronics i.e., AOI Electronics and CLEAN ENERGY go up and down completely randomly.

Pair Corralation between AOI Electronics and CLEAN ENERGY

If you would invest  1,868  in AOI Electronics Co on December 20, 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	100.0%
Values	Daily Returns

AOI Electronics Co  vs.  CLEAN ENERGY FUELS

AOI Electronics

Risk-Adjusted Performance

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.

CLEAN ENERGY FUELS

Risk-Adjusted Performance

Very Weak

Over the last 90 days CLEAN ENERGY FUELS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with AOI Electronics and CLEAN ENERGY

The main advantage of trading using opposite AOI Electronics and CLEAN ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AOI Electronics position performs unexpectedly, CLEAN ENERGY 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 CLEAN ENERGY will offset losses from the drop in CLEAN ENERGY's long position.

The idea behind AOI Electronics Co and CLEAN ENERGY FUELS 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.