Correlation Between AU Optronics and Stark Technology
Can any of the company-specific risk be diversified away by investing in both AU Optronics and Stark 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 Stark 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 Stark Technology, you can compare the effects of market volatilities on AU Optronics and Stark 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 Stark Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of AU Optronics and Stark Technology.
Diversification Opportunities for AU Optronics and Stark Technology
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 2409 and Stark is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding AU Optronics and Stark Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stark 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 Stark Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stark Technology has no effect on the direction of AU Optronics i.e., AU Optronics and Stark Technology go up and down completely randomly.
Pair Corralation between AU Optronics and Stark Technology
Assuming the 90 days trading horizon AU Optronics is expected to generate 2.66 times more return on investment than Stark Technology. However, AU Optronics is 2.66 times more volatile than Stark Technology. It trades about 0.0 of its potential returns per unit of risk. Stark Technology is currently generating about -0.19 per unit of risk. If you would invest 1,605 in AU Optronics on September 5, 2024 and sell it today you would lose (5.00) from holding AU Optronics or give up 0.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
AU Optronics vs. Stark Technology
Performance |
| Timeline |
| AU Optronics |
| Stark Technology |
AU Optronics and Stark Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AU Optronics and Stark Technology
The main advantage of trading using opposite AU Optronics and Stark Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AU Optronics position performs unexpectedly, Stark 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 Stark Technology will offset losses from the drop in Stark 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 |
| Stark Technology vs. Micro Star International Co | Stark Technology vs. Synnex Technology International | Stark Technology vs. Gigabyte Technology Co | Stark Technology vs. Realtek Semiconductor 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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