Correlation Between AU Optronics and Mospec Semiconductor
Can any of the company-specific risk be diversified away by investing in both AU Optronics and Mospec Semiconductor 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 Mospec Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AU Optronics and Mospec Semiconductor Corp, you can compare the effects of market volatilities on AU Optronics and Mospec Semiconductor 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 Mospec Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of AU Optronics and Mospec Semiconductor.
Diversification Opportunities for AU Optronics and Mospec Semiconductor
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 2409 and Mospec is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding AU Optronics and Mospec Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mospec Semiconductor Corp 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 Mospec Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mospec Semiconductor Corp has no effect on the direction of AU Optronics i.e., AU Optronics and Mospec Semiconductor go up and down completely randomly.
Pair Corralation between AU Optronics and Mospec Semiconductor
Assuming the 90 days trading horizon AU Optronics is expected to under-perform the Mospec Semiconductor. In addition to that, AU Optronics is 1.07 times more volatile than Mospec Semiconductor Corp. It trades about -0.09 of its total potential returns per unit of risk. Mospec Semiconductor Corp is currently generating about -0.06 per unit of volatility. If you would invest 3,200 in Mospec Semiconductor Corp on September 12, 2024 and sell it today you would lose (50.00) from holding Mospec Semiconductor Corp or give up 1.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
AU Optronics vs. Mospec Semiconductor Corp
Performance |
| Timeline |
| AU Optronics |
| Mospec Semiconductor Corp |
AU Optronics and Mospec Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AU Optronics and Mospec Semiconductor
The main advantage of trading using opposite AU Optronics and Mospec Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AU Optronics position performs unexpectedly, Mospec Semiconductor 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 Mospec Semiconductor will offset losses from the drop in Mospec Semiconductor's long position.| AU Optronics vs. Innolux Corp | AU Optronics vs. Ruentex Development Co | AU Optronics vs. WiseChip Semiconductor | AU Optronics vs. Novatek Microelectronics Corp |
| Mospec Semiconductor vs. AU Optronics | Mospec Semiconductor vs. Innolux Corp | Mospec Semiconductor vs. Ruentex Development Co | Mospec Semiconductor vs. WiseChip 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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