Correlation Between AU Optronics and ALi Corp
Can any of the company-specific risk be diversified away by investing in both AU Optronics and ALi Corp 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 ALi Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AU Optronics and ALi Corp, you can compare the effects of market volatilities on AU Optronics and ALi Corp 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 ALi Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of AU Optronics and ALi Corp.
Diversification Opportunities for AU Optronics and ALi Corp
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 2409 and ALi is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding AU Optronics and ALi Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALi Corp 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 are associated (or correlated) with ALi Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALi Corp has no effect on the direction of AU Optronics i.e., AU Optronics and ALi Corp go up and down completely randomly.
Pair Corralation between AU Optronics and ALi Corp
Assuming the 90 days trading horizon AU Optronics is expected to generate 0.58 times more return on investment than ALi Corp. However, AU Optronics is 1.73 times less risky than ALi Corp. It trades about 0.22 of its potential returns per unit of risk. ALi Corp is currently generating about 0.06 per unit of risk. If you would invest 1,375 in AU Optronics on December 4, 2024 and sell it today you would earn a total of 105.00 from holding AU Optronics or generate 7.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
AU Optronics vs. ALi Corp
Performance |
Timeline |
AU Optronics |
ALi Corp |
AU Optronics and ALi Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AU Optronics and ALi Corp
The main advantage of trading using opposite AU Optronics and ALi Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AU Optronics position performs unexpectedly, ALi Corp 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 ALi Corp will offset losses from the drop in ALi Corp's long position.AU Optronics vs. Innolux Corp | AU Optronics vs. United Microelectronics | AU Optronics vs. China Steel Corp | AU Optronics vs. Quanta Computer |
ALi Corp vs. Sunplus Technology Co | ALi Corp vs. Silicon Integrated Systems | ALi Corp vs. Zinwell | ALi Corp vs. Altek 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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |