Correlation Between Snap and AU Optronics
Can any of the company-specific risk be diversified away by investing in both Snap 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 Snap and AU Optronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and AU Optronics, you can compare the effects of market volatilities on Snap 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 Snap with a short position of AU Optronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and AU Optronics.
Diversification Opportunities for Snap and AU Optronics
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Snap and 2409 is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and AU Optronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AU Optronics and Snap 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 Snap Inc 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 Snap i.e., Snap and AU Optronics go up and down completely randomly.
Pair Corralation between Snap and AU Optronics
Given the investment horizon of 90 days Snap Inc is expected to generate 2.1 times more return on investment than AU Optronics. However, Snap is 2.1 times more volatile than AU Optronics. It trades about 0.03 of its potential returns per unit of risk. AU Optronics is currently generating about 0.01 per unit of risk. If you would invest 1,010 in Snap Inc on August 26, 2024 and sell it today you would earn a total of 132.00 from holding Snap Inc or generate 13.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.78% |
| Values | Daily Returns |
Snap Inc vs. AU Optronics
Performance |
| Timeline |
| Snap Inc |
| AU Optronics |
Snap and AU Optronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and AU Optronics
The main advantage of trading using opposite Snap and AU Optronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap 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.The idea behind Snap Inc and AU Optronics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| AU Optronics vs. Novatek Microelectronics Corp | AU Optronics vs. Quanta Computer | AU Optronics vs. United Microelectronics |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |