Correlation Between AU Optronics and Gemtek Technology
Can any of the company-specific risk be diversified away by investing in both AU Optronics and Gemtek Technology 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 Gemtek Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AU Optronics and Gemtek Technology Co, you can compare the effects of market volatilities on AU Optronics and Gemtek Technology 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 Gemtek Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of AU Optronics and Gemtek Technology.
Diversification Opportunities for AU Optronics and Gemtek Technology
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 2409 and Gemtek is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding AU Optronics and Gemtek Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gemtek Technology 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 Gemtek Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gemtek Technology has no effect on the direction of AU Optronics i.e., AU Optronics and Gemtek Technology go up and down completely randomly.
Pair Corralation between AU Optronics and Gemtek Technology
Assuming the 90 days trading horizon AU Optronics is expected to under-perform the Gemtek Technology. But the stock apears to be less risky and, when comparing its historical volatility, AU Optronics is 1.31 times less risky than Gemtek Technology. The stock trades about -0.04 of its potential returns per unit of risk. The Gemtek Technology Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,355 in Gemtek Technology Co on September 3, 2024 and sell it today you would earn a total of 245.00 from holding Gemtek Technology Co or generate 7.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AU Optronics vs. Gemtek Technology Co
Performance |
| Timeline |
| AU Optronics |
| Gemtek Technology |
AU Optronics and Gemtek Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AU Optronics and Gemtek Technology
The main advantage of trading using opposite AU Optronics and Gemtek Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AU Optronics position performs unexpectedly, Gemtek Technology 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 Gemtek Technology will offset losses from the drop in Gemtek Technology's long position.| AU Optronics vs. Innolux Corp | AU Optronics vs. United Microelectronics | AU Optronics vs. China Steel Corp | AU Optronics vs. Quanta Computer |
| Gemtek Technology vs. Taiwan Semiconductor Manufacturing | Gemtek Technology vs. Yang Ming Marine | Gemtek Technology vs. ASE Industrial Holding | Gemtek Technology 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |