Correlation Between AU Optronics and Nichidenbo Corp
Can any of the company-specific risk be diversified away by investing in both AU Optronics and Nichidenbo 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 Nichidenbo 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 Nichidenbo Corp, you can compare the effects of market volatilities on AU Optronics and Nichidenbo 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 Nichidenbo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of AU Optronics and Nichidenbo Corp.
Diversification Opportunities for AU Optronics and Nichidenbo Corp
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 2409 and Nichidenbo is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding AU Optronics and Nichidenbo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nichidenbo 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 Nichidenbo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nichidenbo Corp has no effect on the direction of AU Optronics i.e., AU Optronics and Nichidenbo Corp go up and down completely randomly.
Pair Corralation between AU Optronics and Nichidenbo Corp
Assuming the 90 days trading horizon AU Optronics is expected to under-perform the Nichidenbo Corp. In addition to that, AU Optronics is 1.77 times more volatile than Nichidenbo Corp. It trades about -0.23 of its total potential returns per unit of risk. Nichidenbo Corp is currently generating about -0.26 per unit of volatility. If you would invest 7,060 in Nichidenbo Corp on October 12, 2024 and sell it today you would lose (460.00) from holding Nichidenbo Corp or give up 6.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AU Optronics vs. Nichidenbo Corp
Performance |
| Timeline |
| AU Optronics |
| Nichidenbo Corp |
AU Optronics and Nichidenbo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AU Optronics and Nichidenbo Corp
The main advantage of trading using opposite AU Optronics and Nichidenbo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AU Optronics position performs unexpectedly, Nichidenbo 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 Nichidenbo Corp will offset losses from the drop in Nichidenbo 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 |
| Nichidenbo Corp vs. Holy Stone Enterprise | Nichidenbo Corp vs. Walsin Technology Corp | Nichidenbo Corp vs. Yageo Corp | Nichidenbo Corp 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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