Correlation Between AU Optronics and BenQ Materials
Can any of the company-specific risk be diversified away by investing in both AU Optronics and BenQ Materials 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 BenQ Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AU Optronics and BenQ Materials Corp, you can compare the effects of market volatilities on AU Optronics and BenQ Materials 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 BenQ Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of AU Optronics and BenQ Materials.
Diversification Opportunities for AU Optronics and BenQ Materials
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 2409 and BenQ is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding AU Optronics and BenQ Materials Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BenQ Materials 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 BenQ Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BenQ Materials Corp has no effect on the direction of AU Optronics i.e., AU Optronics and BenQ Materials go up and down completely randomly.
Pair Corralation between AU Optronics and BenQ Materials
Assuming the 90 days trading horizon AU Optronics is expected to generate 1.04 times more return on investment than BenQ Materials. However, AU Optronics is 1.04 times more volatile than BenQ Materials Corp. It trades about -0.02 of its potential returns per unit of risk. BenQ Materials Corp is currently generating about -0.02 per unit of risk. If you would invest 1,883 in AU Optronics on September 12, 2024 and sell it today you would lose (323.00) from holding AU Optronics or give up 17.15% 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. BenQ Materials Corp
Performance |
| Timeline |
| AU Optronics |
| BenQ Materials Corp |
AU Optronics and BenQ Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AU Optronics and BenQ Materials
The main advantage of trading using opposite AU Optronics and BenQ Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AU Optronics position performs unexpectedly, BenQ Materials 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 BenQ Materials will offset losses from the drop in BenQ Materials' long position.| AU Optronics vs. Innolux Corp | AU Optronics vs. Ruentex Development Co | AU Optronics vs. WiseChip Semiconductor | AU Optronics vs. Novatek Microelectronics Corp |
| BenQ Materials vs. AU Optronics | BenQ Materials vs. Innolux Corp | BenQ Materials vs. Ruentex Development Co | BenQ Materials 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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