Correlation Between AU Optronics and Wha Yu
Can any of the company-specific risk be diversified away by investing in both AU Optronics and Wha Yu 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 Wha Yu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AU Optronics and Wha Yu Industrial, you can compare the effects of market volatilities on AU Optronics and Wha Yu 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 Wha Yu. Check out your portfolio center. Please also check ongoing floating volatility patterns of AU Optronics and Wha Yu.
Diversification Opportunities for AU Optronics and Wha Yu
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 2409 and Wha is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding AU Optronics and Wha Yu Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wha Yu Industrial 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 Wha Yu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wha Yu Industrial has no effect on the direction of AU Optronics i.e., AU Optronics and Wha Yu go up and down completely randomly.
Pair Corralation between AU Optronics and Wha Yu
Assuming the 90 days trading horizon AU Optronics is expected to under-perform the Wha Yu. But the stock apears to be less risky and, when comparing its historical volatility, AU Optronics is 1.61 times less risky than Wha Yu. The stock trades about -0.08 of its potential returns per unit of risk. The Wha Yu Industrial is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,680 in Wha Yu Industrial on September 16, 2024 and sell it today you would earn a total of 55.00 from holding Wha Yu Industrial or generate 3.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
AU Optronics vs. Wha Yu Industrial
Performance |
Timeline |
AU Optronics |
Wha Yu Industrial |
AU Optronics and Wha Yu Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AU Optronics and Wha Yu
The main advantage of trading using opposite AU Optronics and Wha Yu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AU Optronics position performs unexpectedly, Wha Yu 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 Wha Yu will offset losses from the drop in Wha Yu's long position.AU Optronics vs. Innolux Corp | AU Optronics vs. Ruentex Development Co | AU Optronics vs. WiseChip Semiconductor | AU Optronics vs. Novatek Microelectronics Corp |
Wha Yu vs. AU Optronics | Wha Yu vs. Innolux Corp | Wha Yu vs. Ruentex Development Co | Wha Yu vs. WiseChip Semiconductor |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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