Correlation Between Polytronics Technology and AU Optronics
Can any of the company-specific risk be diversified away by investing in both Polytronics Technology 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 Polytronics Technology and AU Optronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polytronics Technology Corp and AU Optronics, you can compare the effects of market volatilities on Polytronics Technology 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 Polytronics Technology with a short position of AU Optronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polytronics Technology and AU Optronics.
Diversification Opportunities for Polytronics Technology and AU Optronics
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Polytronics and 2409 is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Polytronics Technology Corp and AU Optronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AU Optronics and Polytronics Technology 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 Polytronics Technology 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 Polytronics Technology i.e., Polytronics Technology and AU Optronics go up and down completely randomly.
Pair Corralation between Polytronics Technology and AU Optronics
Assuming the 90 days trading horizon Polytronics Technology Corp is expected to under-perform the AU Optronics. In addition to that, Polytronics Technology is 2.28 times more volatile than AU Optronics. It trades about -0.06 of its total potential returns per unit of risk. AU Optronics is currently generating about 0.05 per unit of volatility. If you would invest 1,555 in AU Optronics on September 15, 2024 and sell it today you would earn a total of 20.00 from holding AU Optronics or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Polytronics Technology Corp vs. AU Optronics
Performance |
| Timeline |
| Polytronics Technology |
| AU Optronics |
Polytronics Technology and AU Optronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polytronics Technology and AU Optronics
The main advantage of trading using opposite Polytronics Technology and AU Optronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polytronics Technology 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.| Polytronics Technology vs. Thinking Electronic Industrial | Polytronics Technology vs. Amazing Microelectronic | Polytronics Technology vs. Cleanaway Co | Polytronics Technology vs. Wah Lee Industrial |
| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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