Correlation Between Global Mixed and AU Optronics
Can any of the company-specific risk be diversified away by investing in both Global Mixed 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 Global Mixed and AU Optronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Mixed Mode Technology and AU Optronics, you can compare the effects of market volatilities on Global Mixed 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 Global Mixed with a short position of AU Optronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Mixed and AU Optronics.
Diversification Opportunities for Global Mixed and AU Optronics
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and 2409 is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Global Mixed Mode Technology and AU Optronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AU Optronics and Global Mixed 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 Global Mixed Mode Technology 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 Global Mixed i.e., Global Mixed and AU Optronics go up and down completely randomly.
Pair Corralation between Global Mixed and AU Optronics
Assuming the 90 days trading horizon Global Mixed Mode Technology is expected to generate 0.91 times more return on investment than AU Optronics. However, Global Mixed Mode Technology is 1.1 times less risky than AU Optronics. It trades about 0.14 of its potential returns per unit of risk. AU Optronics is currently generating about -0.03 per unit of risk. If you would invest 21,400 in Global Mixed Mode Technology on September 12, 2024 and sell it today you would earn a total of 2,650 from holding Global Mixed Mode Technology or generate 12.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Mixed Mode Technology vs. AU Optronics
Performance |
| Timeline |
| Global Mixed Mode |
| AU Optronics |
Global Mixed and AU Optronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Mixed and AU Optronics
The main advantage of trading using opposite Global Mixed and AU Optronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Mixed 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.| Global Mixed vs. Sitronix Technology Corp | Global Mixed vs. Novatek Microelectronics Corp | Global Mixed vs. Global Unichip Corp | Global Mixed vs. Holtek Semiconductor |
| 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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