Correlation Between AU Optronics and Ko Ja
Can any of the company-specific risk be diversified away by investing in both AU Optronics and Ko Ja 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 Ko Ja into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AU Optronics and Ko Ja Cayman, you can compare the effects of market volatilities on AU Optronics and Ko Ja 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 Ko Ja. Check out your portfolio center. Please also check ongoing floating volatility patterns of AU Optronics and Ko Ja.
Diversification Opportunities for AU Optronics and Ko Ja
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 2409 and 5215 is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding AU Optronics and Ko Ja Cayman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ko Ja Cayman 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 Ko Ja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ko Ja Cayman has no effect on the direction of AU Optronics i.e., AU Optronics and Ko Ja go up and down completely randomly.
Pair Corralation between AU Optronics and Ko Ja
Assuming the 90 days trading horizon AU Optronics is expected to under-perform the Ko Ja. But the stock apears to be less risky and, when comparing its historical volatility, AU Optronics is 1.26 times less risky than Ko Ja. The stock trades about -0.01 of its potential returns per unit of risk. The Ko Ja Cayman is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 4,710 in Ko Ja Cayman on September 3, 2024 and sell it today you would earn a total of 50.00 from holding Ko Ja Cayman or generate 1.06% 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. Ko Ja Cayman
Performance |
| Timeline |
| AU Optronics |
| Ko Ja Cayman |
AU Optronics and Ko Ja Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AU Optronics and Ko Ja
The main advantage of trading using opposite AU Optronics and Ko Ja positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AU Optronics position performs unexpectedly, Ko Ja 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 Ko Ja will offset losses from the drop in Ko Ja's long position.| AU Optronics vs. Innolux Corp | AU Optronics vs. United Microelectronics | AU Optronics vs. China Steel Corp | AU Optronics vs. Quanta Computer |
| Ko Ja vs. Taiwan Semiconductor Manufacturing | Ko Ja vs. Yang Ming Marine | Ko Ja vs. ASE Industrial Holding | Ko Ja 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |