Correlation Between AU Optronics and Nan Ya
Can any of the company-specific risk be diversified away by investing in both AU Optronics and Nan Ya 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 Nan Ya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AU Optronics and Nan Ya Printed, you can compare the effects of market volatilities on AU Optronics and Nan Ya 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 Nan Ya. Check out your portfolio center. Please also check ongoing floating volatility patterns of AU Optronics and Nan Ya.
Diversification Opportunities for AU Optronics and Nan Ya
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 2409 and Nan is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding AU Optronics and Nan Ya Printed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nan Ya Printed 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 Nan Ya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nan Ya Printed has no effect on the direction of AU Optronics i.e., AU Optronics and Nan Ya go up and down completely randomly.
Pair Corralation between AU Optronics and Nan Ya
Assuming the 90 days trading horizon AU Optronics is expected to generate 0.84 times more return on investment than Nan Ya. However, AU Optronics is 1.19 times less risky than Nan Ya. It trades about 0.02 of its potential returns per unit of risk. Nan Ya Printed is currently generating about -0.06 per unit of risk. If you would invest 1,470 in AU Optronics on September 12, 2024 and sell it today you would earn a total of 90.00 from holding AU Optronics or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AU Optronics vs. Nan Ya Printed
Performance |
| Timeline |
| AU Optronics |
| Nan Ya Printed |
AU Optronics and Nan Ya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AU Optronics and Nan Ya
The main advantage of trading using opposite AU Optronics and Nan Ya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AU Optronics position performs unexpectedly, Nan Ya 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 Nan Ya will offset losses from the drop in Nan Ya'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 |
| Nan Ya vs. AU Optronics | Nan Ya vs. Innolux Corp | Nan Ya vs. Ruentex Development Co | Nan Ya 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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