Correlation Between AU Optronics and Methode Electronics
Can any of the company-specific risk be diversified away by investing in both AU Optronics and Methode Electronics 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 AU Optronics and Methode Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AU Optronics Corp and Methode Electronics, you can compare the effects of market volatilities on AU Optronics and Methode Electronics 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 AU Optronics with a short position of Methode Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of AU Optronics and Methode Electronics.
Diversification Opportunities for AU Optronics and Methode Electronics
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between AUOTY and Methode is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding AU Optronics Corp and Methode Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Methode Electronics and AU Optronics 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 AU Optronics Corp are associated (or correlated) with Methode Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Methode Electronics has no effect on the direction of AU Optronics i.e., AU Optronics and Methode Electronics go up and down completely randomly.
Pair Corralation between AU Optronics and Methode Electronics
If you would invest 590.00 in AU Optronics Corp on November 4, 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 | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
AU Optronics Corp vs. Methode Electronics
Performance |
| Timeline |
| AU Optronics Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Methode Electronics |
AU Optronics and Methode Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AU Optronics and Methode Electronics
The main advantage of trading using opposite AU Optronics and Methode Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AU Optronics position performs unexpectedly, Methode Electronics 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 Methode Electronics will offset losses from the drop in Methode Electronics' long position.| AU Optronics vs. alpha En | AU Optronics vs. Alps Electric Co | AU Optronics vs. Bitmine Immersion Technologies | AU Optronics vs. American Aires |
| Methode Electronics vs. Sanmina | Methode Electronics vs. Benchmark Electronics | Methode Electronics vs. OSI Systems | Methode Electronics vs. Celestica |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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