Correlation Between AU Optronics and IEI Integration
Can any of the company-specific risk be diversified away by investing in both AU Optronics and IEI Integration 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 IEI Integration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AU Optronics and IEI Integration Corp, you can compare the effects of market volatilities on AU Optronics and IEI Integration 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 IEI Integration. Check out your portfolio center. Please also check ongoing floating volatility patterns of AU Optronics and IEI Integration.
Diversification Opportunities for AU Optronics and IEI Integration
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 2409 and IEI is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding AU Optronics and IEI Integration Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IEI Integration 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 IEI Integration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IEI Integration Corp has no effect on the direction of AU Optronics i.e., AU Optronics and IEI Integration go up and down completely randomly.
Pair Corralation between AU Optronics and IEI Integration
Assuming the 90 days trading horizon AU Optronics is expected to under-perform the IEI Integration. In addition to that, AU Optronics is 1.59 times more volatile than IEI Integration Corp. It trades about -0.22 of its total potential returns per unit of risk. IEI Integration Corp is currently generating about -0.1 per unit of volatility. If you would invest 8,080 in IEI Integration Corp on October 7, 2024 and sell it today you would lose (230.00) from holding IEI Integration Corp or give up 2.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AU Optronics vs. IEI Integration Corp
Performance |
| Timeline |
| AU Optronics |
| IEI Integration Corp |
AU Optronics and IEI Integration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AU Optronics and IEI Integration
The main advantage of trading using opposite AU Optronics and IEI Integration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AU Optronics position performs unexpectedly, IEI Integration 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 IEI Integration will offset losses from the drop in IEI Integration's long position.| AU Optronics vs. Innolux Corp | AU Optronics vs. United Microelectronics | AU Optronics vs. China Steel Corp | AU Optronics vs. Quanta Computer |
| IEI Integration vs. Holy Stone Enterprise | IEI Integration vs. Walsin Technology Corp | IEI Integration vs. Yageo Corp | IEI Integration vs. HannStar Board 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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