Correlation Between YuantaP Shares and AU Optronics
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and AU Optronics 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 YuantaP Shares and AU Optronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YuantaP shares Taiwan Mid Cap and AU Optronics, you can compare the effects of market volatilities on YuantaP Shares and AU Optronics 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 YuantaP Shares with a short position of AU Optronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and AU Optronics.
Diversification Opportunities for YuantaP Shares and AU Optronics
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between YuantaP and 2409 is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Mid Cap and AU Optronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AU Optronics and YuantaP Shares 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 YuantaP shares Taiwan Mid Cap are associated (or correlated) with AU Optronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AU Optronics has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and AU Optronics go up and down completely randomly.
Pair Corralation between YuantaP Shares and AU Optronics
Assuming the 90 days trading horizon YuantaP shares Taiwan Mid Cap is expected to generate 0.64 times more return on investment than AU Optronics. However, YuantaP shares Taiwan Mid Cap is 1.55 times less risky than AU Optronics. It trades about -0.03 of its potential returns per unit of risk. AU Optronics is currently generating about -0.04 per unit of risk. If you would invest 8,165 in YuantaP shares Taiwan Mid Cap on September 1, 2024 and sell it today you would lose (480.00) from holding YuantaP shares Taiwan Mid Cap or give up 5.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
YuantaP shares Taiwan Mid Cap vs. AU Optronics
Performance |
| Timeline |
| YuantaP shares Taiwan |
| AU Optronics |
YuantaP Shares and AU Optronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and AU Optronics
The main advantage of trading using opposite YuantaP Shares and AU Optronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, AU Optronics 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 AU Optronics will offset losses from the drop in AU Optronics' long position.| YuantaP Shares vs. YuantaP shares Taiwan Top | YuantaP Shares vs. YuantaP shares MSCI Taiwan | YuantaP Shares vs. YuantaP shares Taiwan GreTai | YuantaP Shares vs. YuantaP shares SSE50 |
| AU Optronics vs. Innolux Corp | AU Optronics vs. United Microelectronics | AU Optronics vs. China Steel Corp | AU Optronics vs. Quanta Computer |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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