Correlation Between AU Optronics and Advanced Wireless
Can any of the company-specific risk be diversified away by investing in both AU Optronics and Advanced Wireless 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 Advanced Wireless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AU Optronics and Advanced Wireless Semiconductor, you can compare the effects of market volatilities on AU Optronics and Advanced Wireless 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 Advanced Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of AU Optronics and Advanced Wireless.
Diversification Opportunities for AU Optronics and Advanced Wireless
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 2409 and Advanced is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding AU Optronics and Advanced Wireless Semiconducto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Wireless 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 Advanced Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Wireless has no effect on the direction of AU Optronics i.e., AU Optronics and Advanced Wireless go up and down completely randomly.
Pair Corralation between AU Optronics and Advanced Wireless
Assuming the 90 days trading horizon AU Optronics is expected to under-perform the Advanced Wireless. But the stock apears to be less risky and, when comparing its historical volatility, AU Optronics is 1.61 times less risky than Advanced Wireless. The stock trades about -0.21 of its potential returns per unit of risk. The Advanced Wireless Semiconductor is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 10,100 in Advanced Wireless Semiconductor on October 11, 2024 and sell it today you would earn a total of 0.00 from holding Advanced Wireless Semiconductor or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AU Optronics vs. Advanced Wireless Semiconducto
Performance |
| Timeline |
| AU Optronics |
| Advanced Wireless |
AU Optronics and Advanced Wireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AU Optronics and Advanced Wireless
The main advantage of trading using opposite AU Optronics and Advanced Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AU Optronics position performs unexpectedly, Advanced Wireless 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 Advanced Wireless will offset losses from the drop in Advanced Wireless' long position.| AU Optronics vs. Innolux Corp | AU Optronics vs. United Microelectronics | AU Optronics vs. China Steel Corp | AU Optronics vs. Quanta Computer |
| Advanced Wireless vs. WIN Semiconductors | Advanced Wireless vs. Visual Photonics Epitaxy | Advanced Wireless vs. GlobalWafers Co | Advanced Wireless vs. Unimicron 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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