Correlation Between AU Optronics and Hitron Technologies
Can any of the company-specific risk be diversified away by investing in both AU Optronics and Hitron Technologies 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 AU Optronics and Hitron Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AU Optronics and Hitron Technologies, you can compare the effects of market volatilities on AU Optronics and Hitron Technologies 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 AU Optronics with a short position of Hitron Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of AU Optronics and Hitron Technologies.
Diversification Opportunities for AU Optronics and Hitron Technologies
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between 2409 and Hitron is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding AU Optronics and Hitron Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hitron Technologies and AU Optronics 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 AU Optronics are associated (or correlated) with Hitron Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hitron Technologies has no effect on the direction of AU Optronics i.e., AU Optronics and Hitron Technologies go up and down completely randomly.
Pair Corralation between AU Optronics and Hitron Technologies
Assuming the 90 days trading horizon AU Optronics is expected to under-perform the Hitron Technologies. But the stock apears to be less risky and, when comparing its historical volatility, AU Optronics is 1.39 times less risky than Hitron Technologies. The stock trades about -0.04 of its potential returns per unit of risk. The Hitron Technologies is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,315 in Hitron Technologies on September 4, 2024 and sell it today you would earn a total of 390.00 from holding Hitron Technologies or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AU Optronics vs. Hitron Technologies
Performance |
| Timeline |
| AU Optronics |
| Hitron Technologies |
AU Optronics and Hitron Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AU Optronics and Hitron Technologies
The main advantage of trading using opposite AU Optronics and Hitron Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AU Optronics position performs unexpectedly, Hitron Technologies 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 Hitron Technologies will offset losses from the drop in Hitron Technologies' long position.| AU Optronics vs. Innolux Corp | AU Optronics vs. United Microelectronics | AU Optronics vs. China Steel Corp | AU Optronics vs. Quanta Computer |
| Hitron Technologies vs. Accton Technology Corp | Hitron Technologies vs. D Link Corp | Hitron Technologies vs. Microelectronics Technology | Hitron Technologies vs. Gigastorage 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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