Correlation Between AU Optronics and Career Technology
Can any of the company-specific risk be diversified away by investing in both AU Optronics and Career 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 Career 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 Career Technology MFG, you can compare the effects of market volatilities on AU Optronics and Career 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 Career Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of AU Optronics and Career Technology.
Diversification Opportunities for AU Optronics and Career Technology
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 2409 and Career is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding AU Optronics and Career Technology MFG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Career Technology MFG 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 Career Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Career Technology MFG has no effect on the direction of AU Optronics i.e., AU Optronics and Career Technology go up and down completely randomly.
Pair Corralation between AU Optronics and Career Technology
Assuming the 90 days trading horizon AU Optronics is expected to generate 0.96 times more return on investment than Career Technology. However, AU Optronics is 1.04 times less risky than Career Technology. It trades about -0.24 of its potential returns per unit of risk. Career Technology MFG is currently generating about -0.24 per unit of risk. If you would invest 1,530 in AU Optronics on January 13, 2025 and sell it today you would lose (345.00) from holding AU Optronics or give up 22.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AU Optronics vs. Career Technology MFG
Performance |
| Timeline |
| AU Optronics |
| Career Technology MFG |
AU Optronics and Career Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AU Optronics and Career Technology
The main advantage of trading using opposite AU Optronics and Career Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AU Optronics position performs unexpectedly, Career 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 Career Technology will offset losses from the drop in Career 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 |
| Career Technology vs. Flexium Interconnect | Career Technology vs. Compeq Manufacturing Co | Career Technology vs. Unimicron Technology Corp | Career Technology vs. Tripod Technology 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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