Correlation Between AU Optronics and Via Optronics
Can any of the company-specific risk be diversified away by investing in both AU Optronics and Via 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 AU Optronics and Via Optronics 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 Via Optronics Ag, you can compare the effects of market volatilities on AU Optronics and Via 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 AU Optronics with a short position of Via Optronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of AU Optronics and Via Optronics.
Diversification Opportunities for AU Optronics and Via Optronics
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AUOTY and Via is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding AU Optronics Corp and Via Optronics Ag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Via Optronics Ag 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 Via Optronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Via Optronics Ag has no effect on the direction of AU Optronics i.e., AU Optronics and Via Optronics go up and down completely randomly.
Pair Corralation between AU Optronics and Via Optronics
If you would invest 309.00 in Via Optronics Ag on November 4, 2024 and sell it today you would lose (294.00) from holding Via Optronics Ag or give up 95.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.29% |
| Values | Daily Returns |
AU Optronics Corp vs. Via Optronics Ag
Performance |
| Timeline |
| AU Optronics Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Via Optronics Ag |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
AU Optronics and Via Optronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AU Optronics and Via Optronics
The main advantage of trading using opposite AU Optronics and Via Optronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AU Optronics position performs unexpectedly, Via 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 Via Optronics will offset losses from the drop in Via Optronics' long position.| AU Optronics vs. alpha En | AU Optronics vs. Alps Electric Co | AU Optronics vs. Bitmine Immersion Technologies | AU Optronics vs. American Aires |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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