Correlation Between AU Optronics and FocalTech Systems
Can any of the company-specific risk be diversified away by investing in both AU Optronics and FocalTech Systems 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 FocalTech Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AU Optronics and FocalTech Systems Co, you can compare the effects of market volatilities on AU Optronics and FocalTech Systems 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 FocalTech Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of AU Optronics and FocalTech Systems.
Diversification Opportunities for AU Optronics and FocalTech Systems
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between 2409 and FocalTech is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding AU Optronics and FocalTech Systems Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FocalTech Systems 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 FocalTech Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FocalTech Systems has no effect on the direction of AU Optronics i.e., AU Optronics and FocalTech Systems go up and down completely randomly.
Pair Corralation between AU Optronics and FocalTech Systems
Assuming the 90 days trading horizon AU Optronics is expected to under-perform the FocalTech Systems. But the stock apears to be less risky and, when comparing its historical volatility, AU Optronics is 1.37 times less risky than FocalTech Systems. The stock trades about -0.13 of its potential returns per unit of risk. The FocalTech Systems Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 8,840 in FocalTech Systems Co on September 12, 2024 and sell it today you would lose (40.00) from holding FocalTech Systems Co or give up 0.45% 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. FocalTech Systems Co
Performance |
| Timeline |
| AU Optronics |
| FocalTech Systems |
AU Optronics and FocalTech Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AU Optronics and FocalTech Systems
The main advantage of trading using opposite AU Optronics and FocalTech Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AU Optronics position performs unexpectedly, FocalTech Systems 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 FocalTech Systems will offset losses from the drop in FocalTech Systems' long position.| AU Optronics vs. Innolux Corp | AU Optronics vs. Ruentex Development Co | AU Optronics vs. WiseChip Semiconductor | AU Optronics vs. Novatek Microelectronics Corp |
| FocalTech Systems vs. Novatek Microelectronics Corp | FocalTech Systems vs. Sitronix Technology Corp | FocalTech Systems vs. Elan Microelectronics Corp | FocalTech Systems vs. Global Unichip 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |