Correlation Between AU Optronics and Yufo Electronics
Can any of the company-specific risk be diversified away by investing in both AU Optronics and Yufo Electronics 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 Yufo Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AU Optronics and Yufo Electronics Co, you can compare the effects of market volatilities on AU Optronics and Yufo Electronics 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 Yufo Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of AU Optronics and Yufo Electronics.
Diversification Opportunities for AU Optronics and Yufo Electronics
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 2409 and Yufo is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding AU Optronics and Yufo Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yufo Electronics 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 Yufo Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yufo Electronics has no effect on the direction of AU Optronics i.e., AU Optronics and Yufo Electronics go up and down completely randomly.
Pair Corralation between AU Optronics and Yufo Electronics
Assuming the 90 days trading horizon AU Optronics is expected to generate 4.63 times less return on investment than Yufo Electronics. But when comparing it to its historical volatility, AU Optronics is 1.26 times less risky than Yufo Electronics. It trades about 0.02 of its potential returns per unit of risk. Yufo Electronics Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,237 in Yufo Electronics Co on September 12, 2024 and sell it today you would earn a total of 1,563 from holding Yufo Electronics Co or generate 69.87% 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. Yufo Electronics Co
Performance |
| Timeline |
| AU Optronics |
| Yufo Electronics |
AU Optronics and Yufo Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AU Optronics and Yufo Electronics
The main advantage of trading using opposite AU Optronics and Yufo Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AU Optronics position performs unexpectedly, Yufo Electronics 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 Yufo Electronics will offset losses from the drop in Yufo Electronics' long position.| AU Optronics vs. Innolux Corp | AU Optronics vs. Ruentex Development Co | AU Optronics vs. WiseChip Semiconductor | AU Optronics vs. Novatek Microelectronics Corp |
| Yufo Electronics vs. AU Optronics | Yufo Electronics vs. Innolux Corp | Yufo Electronics vs. Ruentex Development Co | Yufo Electronics 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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