Correlation Between AOI Electronics and GRUPO ECOENER

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

Diversification Opportunities for AOI Electronics and GRUPO ECOENER

0.0

Correlation Coefficient

AOI Electronics  GRUPO ECOENER

Pay attention - limited upside

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

Pair Corralation between AOI Electronics and GRUPO ECOENER

If you would invest  370.00  in GRUPO ECOENER EO on September 23, 2024 and sell it today you would earn a total of  55.00  from holding GRUPO ECOENER EO or generate 14.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

AOI Electronics Co  vs.  GRUPO ECOENER EO

AOI Electronics

Risk-Adjusted Performance

0 of 100

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 current stock price uproar, may contribute to short-horizon losses for the private investors.

GRUPO ECOENER EO

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GRUPO ECOENER EO are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, GRUPO ECOENER reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AOI Electronics and GRUPO ECOENER

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

The idea behind AOI Electronics Co and GRUPO ECOENER EO 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.