Correlation Between AU Optronics and In Win
Can any of the company-specific risk be diversified away by investing in both AU Optronics and In Win 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 In Win into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AU Optronics and In Win Development, you can compare the effects of market volatilities on AU Optronics and In Win 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 In Win. Check out your portfolio center. Please also check ongoing floating volatility patterns of AU Optronics and In Win.
Diversification Opportunities for AU Optronics and In Win
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 2409 and 6117 is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding AU Optronics and In Win Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on In Win Development 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 In Win. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of In Win Development has no effect on the direction of AU Optronics i.e., AU Optronics and In Win go up and down completely randomly.
Pair Corralation between AU Optronics and In Win
Assuming the 90 days trading horizon AU Optronics is expected to under-perform the In Win. But the stock apears to be less risky and, when comparing its historical volatility, AU Optronics is 2.67 times less risky than In Win. The stock trades about -0.09 of its potential returns per unit of risk. The In Win Development is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 9,990 in In Win Development on September 12, 2024 and sell it today you would lose (340.00) from holding In Win Development or give up 3.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AU Optronics vs. In Win Development
Performance |
| Timeline |
| AU Optronics |
| In Win Development |
AU Optronics and In Win Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AU Optronics and In Win
The main advantage of trading using opposite AU Optronics and In Win positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AU Optronics position performs unexpectedly, In Win 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 In Win will offset losses from the drop in In Win's long position.| AU Optronics vs. Innolux Corp | AU Optronics vs. Ruentex Development Co | AU Optronics vs. WiseChip Semiconductor | AU Optronics vs. Novatek Microelectronics Corp |
| In Win vs. AU Optronics | In Win vs. Innolux Corp | In Win vs. Ruentex Development Co | In Win vs. WiseChip Semiconductor |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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