Correlation Between Allied Motion and AU Optronics
Can any of the company-specific risk be diversified away by investing in both Allied Motion 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 Allied Motion and AU Optronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allied Motion Technologies and AU Optronics Corp, you can compare the effects of market volatilities on Allied Motion 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 Allied Motion with a short position of AU Optronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Motion and AU Optronics.
Diversification Opportunities for Allied Motion and AU Optronics
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Allied and AUOTY is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Allied Motion Technologies and AU Optronics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AU Optronics Corp and Allied Motion 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 Allied Motion Technologies 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 Corp has no effect on the direction of Allied Motion i.e., Allied Motion and AU Optronics go up and down completely randomly.
Pair Corralation between Allied Motion and AU Optronics
If you would invest 590.00 in AU Optronics Corp on October 25, 2024 and sell it today you would earn a total of 0.00 from holding AU Optronics Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allied Motion Technologies vs. AU Optronics Corp
Performance |
| Timeline |
| Allied Motion Techno |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| AU Optronics Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Allied Motion and AU Optronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allied Motion and AU Optronics
The main advantage of trading using opposite Allied Motion and AU Optronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Motion 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.| Allied Motion vs. Plexus Corp | Allied Motion vs. Sanmina | Allied Motion vs. Bel Fuse A | Allied Motion vs. Methode Electronics |
| AU Optronics vs. alpha En | AU Optronics vs. Alps Electric Co | AU Optronics vs. Bitmine Immersion Technologies | AU Optronics vs. American Aires |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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