Correlation Between AU Optronics and Excellence Optoelectronic
Can any of the company-specific risk be diversified away by investing in both AU Optronics and Excellence Optoelectronic 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 Excellence Optoelectronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AU Optronics and Excellence Optoelectronic, you can compare the effects of market volatilities on AU Optronics and Excellence Optoelectronic 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 Excellence Optoelectronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of AU Optronics and Excellence Optoelectronic.
Diversification Opportunities for AU Optronics and Excellence Optoelectronic
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 2409 and Excellence is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding AU Optronics and Excellence Optoelectronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excellence Optoelectronic 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 Excellence Optoelectronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excellence Optoelectronic has no effect on the direction of AU Optronics i.e., AU Optronics and Excellence Optoelectronic go up and down completely randomly.
Pair Corralation between AU Optronics and Excellence Optoelectronic
Assuming the 90 days trading horizon AU Optronics is expected to under-perform the Excellence Optoelectronic. But the stock apears to be less risky and, when comparing its historical volatility, AU Optronics is 1.54 times less risky than Excellence Optoelectronic. The stock trades about -0.06 of its potential returns per unit of risk. The Excellence Optoelectronic is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,696 in Excellence Optoelectronic on October 26, 2024 and sell it today you would lose (151.00) from holding Excellence Optoelectronic or give up 5.6% 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. Excellence Optoelectronic
Performance |
| Timeline |
| AU Optronics |
| Excellence Optoelectronic |
AU Optronics and Excellence Optoelectronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AU Optronics and Excellence Optoelectronic
The main advantage of trading using opposite AU Optronics and Excellence Optoelectronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AU Optronics position performs unexpectedly, Excellence Optoelectronic 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 Excellence Optoelectronic will offset losses from the drop in Excellence Optoelectronic's long position.| AU Optronics vs. Innolux Corp | AU Optronics vs. United Microelectronics | AU Optronics vs. China Steel Corp | AU Optronics vs. Quanta Computer |
| Excellence Optoelectronic vs. Hota Industrial Mfg | Excellence Optoelectronic vs. BizLink Holding | Excellence Optoelectronic vs. Tong Hsing Electronic | Excellence Optoelectronic vs. SDI 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |