Correlation Between Orient Semiconductor and Auden Techno
Can any of the company-specific risk be diversified away by investing in both Orient Semiconductor 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 Orient Semiconductor and Auden Techno into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orient Semiconductor Electronics and Auden Techno, you can compare the effects of market volatilities on Orient Semiconductor 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 Orient Semiconductor with a short position of Auden Techno. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orient Semiconductor and Auden Techno.
Diversification Opportunities for Orient Semiconductor and Auden Techno
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Orient and Auden is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Orient Semiconductor Electroni and Auden Techno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auden Techno and Orient Semiconductor 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 Orient Semiconductor Electronics 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 Orient Semiconductor i.e., Orient Semiconductor and Auden Techno go up and down completely randomly.
Pair Corralation between Orient Semiconductor and Auden Techno
Assuming the 90 days trading horizon Orient Semiconductor Electronics is expected to generate 1.37 times more return on investment than Auden Techno. However, Orient Semiconductor is 1.37 times more volatile than Auden Techno. It trades about 0.06 of its potential returns per unit of risk. Auden Techno is currently generating about -0.01 per unit of risk. If you would invest 1,760 in Orient Semiconductor Electronics on September 13, 2024 and sell it today you would earn a total of 1,830 from holding Orient Semiconductor Electronics or generate 103.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orient Semiconductor Electroni vs. Auden Techno
Performance |
| Timeline |
| Orient Semiconductor |
| Auden Techno |
Orient Semiconductor and Auden Techno Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orient Semiconductor and Auden Techno
The main advantage of trading using opposite Orient Semiconductor and Auden Techno positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orient Semiconductor 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.| Orient Semiconductor vs. AU Optronics | Orient Semiconductor vs. Innolux Corp | Orient Semiconductor vs. Ruentex Development Co | Orient Semiconductor vs. WiseChip Semiconductor |
| Auden Techno vs. Gemtek Technology Co | Auden Techno vs. Ruentex Development Co | Auden Techno vs. WiseChip Semiconductor | Auden Techno vs. Novatek Microelectronics Corp |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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