Correlation Between Realtek Semiconductor and AU Optronics
Can any of the company-specific risk be diversified away by investing in both Realtek Semiconductor 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 Realtek Semiconductor and AU Optronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Realtek Semiconductor Corp and AU Optronics, you can compare the effects of market volatilities on Realtek Semiconductor 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 Realtek Semiconductor with a short position of AU Optronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Realtek Semiconductor and AU Optronics.
Diversification Opportunities for Realtek Semiconductor and AU Optronics
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Realtek and 2409 is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Realtek Semiconductor Corp and AU Optronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AU Optronics and Realtek 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 Realtek Semiconductor Corp 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 Realtek Semiconductor i.e., Realtek Semiconductor and AU Optronics go up and down completely randomly.
Pair Corralation between Realtek Semiconductor and AU Optronics
Assuming the 90 days trading horizon Realtek Semiconductor Corp is expected to generate 1.38 times more return on investment than AU Optronics. However, Realtek Semiconductor is 1.38 times more volatile than AU Optronics. It trades about 0.21 of its potential returns per unit of risk. AU Optronics is currently generating about -0.03 per unit of risk. If you would invest 49,000 in Realtek Semiconductor Corp on September 13, 2024 and sell it today you would earn a total of 3,700 from holding Realtek Semiconductor Corp or generate 7.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Realtek Semiconductor Corp vs. AU Optronics
Performance |
| Timeline |
| Realtek Semiconductor |
| AU Optronics |
Realtek Semiconductor and AU Optronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Realtek Semiconductor and AU Optronics
The main advantage of trading using opposite Realtek Semiconductor and AU Optronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Realtek Semiconductor 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.| Realtek Semiconductor vs. Novatek Microelectronics Corp | Realtek Semiconductor vs. MediaTek | Realtek Semiconductor vs. VIA Technologies | Realtek Semiconductor vs. Quanta Computer |
| 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 Stocks Directory module to find actively traded stocks across global markets.
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