Correlation Between Asustek Computer and AU Optronics
Can any of the company-specific risk be diversified away by investing in both Asustek Computer 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 Asustek Computer and AU Optronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asustek Computer and AU Optronics, you can compare the effects of market volatilities on Asustek Computer 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 Asustek Computer with a short position of AU Optronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asustek Computer and AU Optronics.
Diversification Opportunities for Asustek Computer and AU Optronics
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Asustek and 2409 is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Asustek Computer and AU Optronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AU Optronics and Asustek Computer 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 Asustek Computer 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 Asustek Computer i.e., Asustek Computer and AU Optronics go up and down completely randomly.
Pair Corralation between Asustek Computer and AU Optronics
Assuming the 90 days trading horizon Asustek Computer is expected to generate 1.12 times more return on investment than AU Optronics. However, Asustek Computer is 1.12 times more volatile than AU Optronics. It trades about 0.06 of its potential returns per unit of risk. AU Optronics is currently generating about -0.04 per unit of risk. If you would invest 51,300 in Asustek Computer on August 29, 2024 and sell it today you would earn a total of 8,100 from holding Asustek Computer or generate 15.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asustek Computer vs. AU Optronics
Performance |
| Timeline |
| Asustek Computer |
| AU Optronics |
Asustek Computer and AU Optronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asustek Computer and AU Optronics
The main advantage of trading using opposite Asustek Computer and AU Optronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asustek Computer 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.| Asustek Computer vs. Quanta Computer | Asustek Computer vs. Acer Inc | Asustek Computer vs. United Microelectronics | Asustek Computer vs. Compal Electronics |
| AU Optronics vs. Sitronix Technology Corp | AU Optronics vs. Elan Microelectronics Corp | AU Optronics vs. Global Unichip Corp | AU Optronics vs. Holtek Semiconductor |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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