Correlation Between AU Optronics and Zenitron Corp
Can any of the company-specific risk be diversified away by investing in both AU Optronics and Zenitron Corp 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 Zenitron Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AU Optronics and Zenitron Corp, you can compare the effects of market volatilities on AU Optronics and Zenitron Corp 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 Zenitron Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of AU Optronics and Zenitron Corp.
Diversification Opportunities for AU Optronics and Zenitron Corp
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 2409 and Zenitron is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding AU Optronics and Zenitron Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zenitron 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 Zenitron Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zenitron Corp has no effect on the direction of AU Optronics i.e., AU Optronics and Zenitron Corp go up and down completely randomly.
Pair Corralation between AU Optronics and Zenitron Corp
Assuming the 90 days trading horizon AU Optronics is expected to generate 2.33 times more return on investment than Zenitron Corp. However, AU Optronics is 2.33 times more volatile than Zenitron Corp. It trades about -0.03 of its potential returns per unit of risk. Zenitron Corp is currently generating about -0.5 per unit of risk. If you would invest 1,590 in AU Optronics on September 13, 2024 and sell it today you would lose (15.00) from holding AU Optronics or give up 0.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AU Optronics vs. Zenitron Corp
Performance |
| Timeline |
| AU Optronics |
| Zenitron Corp |
AU Optronics and Zenitron Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AU Optronics and Zenitron Corp
The main advantage of trading using opposite AU Optronics and Zenitron Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AU Optronics position performs unexpectedly, Zenitron Corp 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 Zenitron Corp will offset losses from the drop in Zenitron Corp's long position.| AU Optronics vs. Innolux Corp | AU Optronics vs. United Microelectronics | AU Optronics vs. China Steel Corp | AU Optronics vs. Quanta Computer |
| Zenitron Corp vs. Weikeng Industrial Co | Zenitron Corp vs. WT Microelectronics Co | Zenitron Corp vs. Edom Technology Co | Zenitron Corp vs. Wah Lee Industrial |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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