Correlation Between AU Optronics and AVer Information
Can any of the company-specific risk be diversified away by investing in both AU Optronics and AVer Information 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 AVer Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AU Optronics and AVer Information, you can compare the effects of market volatilities on AU Optronics and AVer Information 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 AVer Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of AU Optronics and AVer Information.
Diversification Opportunities for AU Optronics and AVer Information
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 2409 and AVer is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding AU Optronics and AVer Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVer Information 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 AVer Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVer Information has no effect on the direction of AU Optronics i.e., AU Optronics and AVer Information go up and down completely randomly.
Pair Corralation between AU Optronics and AVer Information
Assuming the 90 days trading horizon AU Optronics is expected to generate 0.73 times more return on investment than AVer Information. However, AU Optronics is 1.38 times less risky than AVer Information. It trades about 0.01 of its potential returns per unit of risk. AVer Information is currently generating about -0.01 per unit of risk. If you would invest 1,560 in AU Optronics on September 4, 2024 and sell it today you would earn a total of 5.00 from holding AU Optronics or generate 0.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AU Optronics vs. AVer Information
Performance |
| Timeline |
| AU Optronics |
| AVer Information |
AU Optronics and AVer Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AU Optronics and AVer Information
The main advantage of trading using opposite AU Optronics and AVer Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AU Optronics position performs unexpectedly, AVer Information 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 AVer Information will offset losses from the drop in AVer Information's long position.| AU Optronics vs. Innolux Corp | AU Optronics vs. United Microelectronics | AU Optronics vs. China Steel Corp | AU Optronics vs. Quanta Computer |
| AVer Information vs. Taiwan Semiconductor Manufacturing | AVer Information vs. Yang Ming Marine | AVer Information vs. ASE Industrial Holding | AVer Information vs. AU Optronics |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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