Correlation Between AU Optronics and Lelon Electronics
Can any of the company-specific risk be diversified away by investing in both AU Optronics and Lelon Electronics 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 Lelon Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AU Optronics and Lelon Electronics Corp, you can compare the effects of market volatilities on AU Optronics and Lelon Electronics 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 Lelon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of AU Optronics and Lelon Electronics.
Diversification Opportunities for AU Optronics and Lelon Electronics
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between 2409 and Lelon is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding AU Optronics and Lelon Electronics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lelon Electronics 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 Lelon Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lelon Electronics Corp has no effect on the direction of AU Optronics i.e., AU Optronics and Lelon Electronics go up and down completely randomly.
Pair Corralation between AU Optronics and Lelon Electronics
Assuming the 90 days trading horizon AU Optronics is expected to generate 947.0 times less return on investment than Lelon Electronics. In addition to that, AU Optronics is 1.1 times more volatile than Lelon Electronics Corp. It trades about 0.0 of its total potential returns per unit of risk. Lelon Electronics Corp is currently generating about 0.36 per unit of volatility. If you would invest 7,200 in Lelon Electronics Corp on September 5, 2024 and sell it today you would earn a total of 980.00 from holding Lelon Electronics Corp or generate 13.61% 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. Lelon Electronics Corp
Performance |
| Timeline |
| AU Optronics |
| Lelon Electronics Corp |
AU Optronics and Lelon Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AU Optronics and Lelon Electronics
The main advantage of trading using opposite AU Optronics and Lelon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AU Optronics position performs unexpectedly, Lelon Electronics 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 Lelon Electronics will offset losses from the drop in Lelon Electronics' long position.| AU Optronics vs. Innolux Corp | AU Optronics vs. United Microelectronics | AU Optronics vs. China Steel Corp | AU Optronics vs. Quanta Computer |
| Lelon Electronics vs. Taiwan Semiconductor Manufacturing | Lelon Electronics vs. Yang Ming Marine | Lelon Electronics vs. AU Optronics | Lelon Electronics vs. Nan Ya Plastics |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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