Correlation Between AU Optronics and Catcher Technology
Can any of the company-specific risk be diversified away by investing in both AU Optronics and Catcher Technology 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 Catcher Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AU Optronics and Catcher Technology Co, you can compare the effects of market volatilities on AU Optronics and Catcher Technology 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 Catcher Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of AU Optronics and Catcher Technology.
Diversification Opportunities for AU Optronics and Catcher Technology
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 2409 and Catcher is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding AU Optronics and Catcher Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catcher Technology 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 Catcher Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catcher Technology has no effect on the direction of AU Optronics i.e., AU Optronics and Catcher Technology go up and down completely randomly.
Pair Corralation between AU Optronics and Catcher Technology
Assuming the 90 days trading horizon AU Optronics is expected to generate 2.52 times more return on investment than Catcher Technology. However, AU Optronics is 2.52 times more volatile than Catcher Technology Co. It trades about 0.33 of its potential returns per unit of risk. Catcher Technology Co is currently generating about 0.46 per unit of risk. If you would invest 1,375 in AU Optronics on November 28, 2024 and sell it today you would earn a total of 135.00 from holding AU Optronics or generate 9.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
AU Optronics vs. Catcher Technology Co
Performance |
| Timeline |
| AU Optronics |
| Catcher Technology |
AU Optronics and Catcher Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AU Optronics and Catcher Technology
The main advantage of trading using opposite AU Optronics and Catcher Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AU Optronics position performs unexpectedly, Catcher Technology 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 Catcher Technology will offset losses from the drop in Catcher Technology's long position.| AU Optronics vs. Innolux Corp | AU Optronics vs. United Microelectronics | AU Optronics vs. China Steel Corp | AU Optronics vs. Quanta Computer |
| Catcher Technology vs. LARGAN Precision Co | Catcher Technology vs. Delta Electronics | Catcher Technology vs. Quanta Computer | Catcher Technology vs. Pegatron 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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