Correlation Between AU Optronics and ITEQ Corp
Can any of the company-specific risk be diversified away by investing in both AU Optronics and ITEQ Corp 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 ITEQ Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AU Optronics and ITEQ Corp, you can compare the effects of market volatilities on AU Optronics and ITEQ Corp 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 ITEQ Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of AU Optronics and ITEQ Corp.
Diversification Opportunities for AU Optronics and ITEQ Corp
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between 2409 and ITEQ is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding AU Optronics and ITEQ Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITEQ Corp 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 ITEQ Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITEQ Corp has no effect on the direction of AU Optronics i.e., AU Optronics and ITEQ Corp go up and down completely randomly.
Pair Corralation between AU Optronics and ITEQ Corp
Assuming the 90 days trading horizon AU Optronics is expected to generate 0.73 times more return on investment than ITEQ Corp. However, AU Optronics is 1.36 times less risky than ITEQ Corp. It trades about -0.05 of its potential returns per unit of risk. ITEQ Corp is currently generating about -0.1 per unit of risk. If you would invest 1,830 in AU Optronics on September 12, 2024 and sell it today you would lose (270.00) from holding AU Optronics or give up 14.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AU Optronics vs. ITEQ Corp
Performance |
| Timeline |
| AU Optronics |
| ITEQ Corp |
AU Optronics and ITEQ Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AU Optronics and ITEQ Corp
The main advantage of trading using opposite AU Optronics and ITEQ Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AU Optronics position performs unexpectedly, ITEQ Corp 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 ITEQ Corp will offset losses from the drop in ITEQ Corp'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 |
| ITEQ Corp vs. Elite Material Co | ITEQ Corp vs. Taiwan Union Technology | ITEQ Corp vs. Unimicron Technology Corp | ITEQ Corp 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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