Correlation Between Microelectronics and Auden Techno
Can any of the company-specific risk be diversified away by investing in both Microelectronics and Auden Techno 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 Microelectronics and Auden Techno into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microelectronics Technology and Auden Techno, you can compare the effects of market volatilities on Microelectronics and Auden Techno 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 Microelectronics with a short position of Auden Techno. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microelectronics and Auden Techno.
Diversification Opportunities for Microelectronics and Auden Techno
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microelectronics and Auden is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Microelectronics Technology and Auden Techno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auden Techno and Microelectronics 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 Microelectronics Technology are associated (or correlated) with Auden Techno. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auden Techno has no effect on the direction of Microelectronics i.e., Microelectronics and Auden Techno go up and down completely randomly.
Pair Corralation between Microelectronics and Auden Techno
Assuming the 90 days trading horizon Microelectronics Technology is expected to under-perform the Auden Techno. But the stock apears to be less risky and, when comparing its historical volatility, Microelectronics Technology is 1.39 times less risky than Auden Techno. The stock trades about -0.12 of its potential returns per unit of risk. The Auden Techno is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 10,600 in Auden Techno on September 14, 2024 and sell it today you would earn a total of 450.00 from holding Auden Techno or generate 4.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microelectronics Technology vs. Auden Techno
Performance |
| Timeline |
| Microelectronics Tec |
| Auden Techno |
Microelectronics and Auden Techno Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microelectronics and Auden Techno
The main advantage of trading using opposite Microelectronics and Auden Techno positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microelectronics position performs unexpectedly, Auden Techno 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 Auden Techno will offset losses from the drop in Auden Techno's long position.| Microelectronics vs. AU Optronics | Microelectronics vs. Innolux Corp | Microelectronics vs. Ruentex Development Co | Microelectronics vs. WiseChip Semiconductor |
| Auden Techno vs. CyberTAN Technology | Auden Techno vs. Merry Electronics Co | Auden Techno vs. Unizyx Holding Corp | Auden Techno vs. Microelectronics Technology |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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