Correlation Between AOI Electronics and AIR PRODCHEMICALS
Can any of the company-specific risk be diversified away by investing in both AOI Electronics and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS, you can compare the effects of market volatilities on AOI Electronics and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of AOI Electronics and AIR PRODCHEMICALS.
Diversification Opportunities for AOI Electronics and AIR PRODCHEMICALS
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AOI and AIR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AOI Electronics Co and AIR PRODCHEMICALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIR PRODCHEMICALS has no effect on the direction of AOI Electronics i.e., AOI Electronics and AIR PRODCHEMICALS go up and down completely randomly.
Pair Corralation between AOI Electronics and AIR PRODCHEMICALS
If you would invest 25,004 in AIR PRODCHEMICALS on September 3, 2024 and sell it today you would earn a total of 6,626 from holding AIR PRODCHEMICALS or generate 26.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 98.46% |
Values | Daily Returns |
AOI Electronics Co vs. AIR PRODCHEMICALS
Performance |
Timeline |
AOI Electronics |
AIR PRODCHEMICALS |
AOI Electronics and AIR PRODCHEMICALS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AOI Electronics and AIR PRODCHEMICALS
The main advantage of trading using opposite AOI Electronics and AIR PRODCHEMICALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AOI Electronics position performs unexpectedly, AIR PRODCHEMICALS 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 AIR PRODCHEMICALS will offset losses from the drop in AIR PRODCHEMICALS's long position.AOI Electronics vs. Check Point Software | AOI Electronics vs. Unity Software | AOI Electronics vs. Guidewire Software | AOI Electronics vs. Alfa Financial Software |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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