Correlation Between Chunghwa Telecom and AU Optronics
Can any of the company-specific risk be diversified away by investing in both Chunghwa Telecom and AU Optronics 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 Chunghwa Telecom and AU Optronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chunghwa Telecom Co and AU Optronics, you can compare the effects of market volatilities on Chunghwa Telecom and AU Optronics 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 Chunghwa Telecom with a short position of AU Optronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chunghwa Telecom and AU Optronics.
Diversification Opportunities for Chunghwa Telecom and AU Optronics
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chunghwa and 2409 is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Chunghwa Telecom Co and AU Optronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AU Optronics and Chunghwa Telecom 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 Chunghwa Telecom Co are associated (or correlated) with AU Optronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AU Optronics has no effect on the direction of Chunghwa Telecom i.e., Chunghwa Telecom and AU Optronics go up and down completely randomly.
Pair Corralation between Chunghwa Telecom and AU Optronics
Assuming the 90 days trading horizon Chunghwa Telecom Co is expected to generate 0.34 times more return on investment than AU Optronics. However, Chunghwa Telecom Co is 2.94 times less risky than AU Optronics. It trades about 0.0 of its potential returns per unit of risk. AU Optronics is currently generating about -0.01 per unit of risk. If you would invest 12,500 in Chunghwa Telecom Co on September 4, 2024 and sell it today you would lose (200.00) from holding Chunghwa Telecom Co or give up 1.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Chunghwa Telecom Co vs. AU Optronics
Performance |
| Timeline |
| Chunghwa Telecom |
| AU Optronics |
Chunghwa Telecom and AU Optronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chunghwa Telecom and AU Optronics
The main advantage of trading using opposite Chunghwa Telecom and AU Optronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chunghwa Telecom position performs unexpectedly, AU Optronics 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 AU Optronics will offset losses from the drop in AU Optronics' long position.| Chunghwa Telecom vs. China Steel Corp | Chunghwa Telecom vs. Formosa Plastics Corp | Chunghwa Telecom vs. Cathay Financial Holding | Chunghwa Telecom vs. Fubon Financial Holding |
| AU Optronics vs. Innolux Corp | AU Optronics vs. United Microelectronics | AU Optronics vs. China Steel Corp | AU Optronics vs. Quanta Computer |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| CEOs Directory Screen CEOs from public companies around the world |