Correlation Between Posiflex Technology and AU Optronics
Can any of the company-specific risk be diversified away by investing in both Posiflex 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 Posiflex 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 Posiflex Technology and AU Optronics, you can compare the effects of market volatilities on Posiflex 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 Posiflex Technology with a short position of AU Optronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Posiflex Technology and AU Optronics.
Diversification Opportunities for Posiflex Technology and AU Optronics
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Posiflex and 2409 is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Posiflex Technology and AU Optronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AU Optronics and Posiflex 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 Posiflex 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 Posiflex Technology i.e., Posiflex Technology and AU Optronics go up and down completely randomly.
Pair Corralation between Posiflex Technology and AU Optronics
Assuming the 90 days trading horizon Posiflex Technology is expected to generate 1.98 times more return on investment than AU Optronics. However, Posiflex Technology is 1.98 times more volatile than AU Optronics. It trades about 0.38 of its potential returns per unit of risk. AU Optronics is currently generating about -0.11 per unit of risk. If you would invest 21,050 in Posiflex Technology on September 13, 2024 and sell it today you would earn a total of 12,600 from holding Posiflex Technology or generate 59.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Posiflex Technology vs. AU Optronics
Performance |
| Timeline |
| Posiflex Technology |
| AU Optronics |
Posiflex Technology and AU Optronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Posiflex Technology and AU Optronics
The main advantage of trading using opposite Posiflex Technology and AU Optronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Posiflex 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.| Posiflex Technology vs. Flytech Technology Co | Posiflex Technology vs. Advantech Co | Posiflex Technology vs. Ennoconn Corp | Posiflex Technology vs. Chenbro Micom Co |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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