Correlation Between Neo Neon and AU Optronics
Can any of the company-specific risk be diversified away by investing in both Neo Neon 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 Neo Neon and AU Optronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neo Neon Holdings Limited and AU Optronics, you can compare the effects of market volatilities on Neo Neon 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 Neo Neon with a short position of AU Optronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neo Neon and AU Optronics.
Diversification Opportunities for Neo Neon and AU Optronics
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Neo and 2409 is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Neo Neon Holdings Limited and AU Optronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AU Optronics and Neo Neon 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 Neo Neon Holdings Limited 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 Neo Neon i.e., Neo Neon and AU Optronics go up and down completely randomly.
Pair Corralation between Neo Neon and AU Optronics
Assuming the 90 days trading horizon Neo Neon Holdings Limited is expected to generate 1.11 times more return on investment than AU Optronics. However, Neo Neon is 1.11 times more volatile than AU Optronics. It trades about 0.01 of its potential returns per unit of risk. AU Optronics is currently generating about -0.09 per unit of risk. If you would invest 150.00 in Neo Neon Holdings Limited on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Neo Neon Holdings Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Neo Neon Holdings Limited vs. AU Optronics
Performance |
| Timeline |
| Neo Neon Holdings |
| AU Optronics |
Neo Neon and AU Optronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neo Neon and AU Optronics
The main advantage of trading using opposite Neo Neon and AU Optronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neo Neon 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.| Neo Neon vs. ANJI Technology Co | Neo Neon vs. Emerging Display Technologies | Neo Neon vs. U Tech Media Corp | Neo Neon vs. Ruentex Development Co |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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