Correlation Between Zenitron Corp and AU Optronics
Can any of the company-specific risk be diversified away by investing in both Zenitron Corp 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 Zenitron Corp and AU Optronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zenitron Corp and AU Optronics, you can compare the effects of market volatilities on Zenitron Corp 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 Zenitron Corp with a short position of AU Optronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zenitron Corp and AU Optronics.
Diversification Opportunities for Zenitron Corp and AU Optronics
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zenitron and 2409 is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Zenitron Corp and AU Optronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AU Optronics and Zenitron Corp 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 Zenitron Corp 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 Zenitron Corp i.e., Zenitron Corp and AU Optronics go up and down completely randomly.
Pair Corralation between Zenitron Corp and AU Optronics
Assuming the 90 days trading horizon Zenitron Corp is expected to under-perform the AU Optronics. But the stock apears to be less risky and, when comparing its historical volatility, Zenitron Corp is 2.22 times less risky than AU Optronics. The stock trades about -0.5 of its potential returns per unit of risk. The AU Optronics is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 1,595 in AU Optronics on September 16, 2024 and sell it today you would lose (20.00) from holding AU Optronics or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zenitron Corp vs. AU Optronics
Performance |
| Timeline |
| Zenitron Corp |
| AU Optronics |
Zenitron Corp and AU Optronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zenitron Corp and AU Optronics
The main advantage of trading using opposite Zenitron Corp and AU Optronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zenitron Corp 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.| Zenitron Corp vs. AU Optronics | Zenitron Corp vs. Innolux Corp | Zenitron Corp vs. Ruentex Development Co | Zenitron Corp vs. WiseChip Semiconductor |
| AU Optronics vs. Innolux Corp | AU Optronics vs. Ruentex Development Co | AU Optronics vs. WiseChip Semiconductor | AU Optronics vs. Novatek Microelectronics 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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