Correlation Between AU Optronics and Sysage Technology

Can any of the company-specific risk be diversified away by investing in both AU Optronics and Sysage Technology 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 Sysage Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AU Optronics and Sysage Technology Co, you can compare the effects of market volatilities on AU Optronics and Sysage Technology 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 Sysage Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of AU Optronics and Sysage Technology.

Diversification Opportunities for AU Optronics and Sysage Technology

-0.32

Correlation Coefficient

AU Optronics  Sysage Technology

Very good diversification

The 3 months correlation between 2409 and Sysage is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding AU Optronics and Sysage Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sysage Technology 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 Sysage Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sysage Technology has no effect on the direction of AU Optronics i.e., AU Optronics and Sysage Technology go up and down completely randomly.

Pair Corralation between AU Optronics and Sysage Technology

Assuming the 90 days trading horizon AU Optronics is expected to under-perform the Sysage Technology. But the stock apears to be less risky and, when comparing its historical volatility, AU Optronics is 2.88 times less risky than Sysage Technology. The stock trades about -0.27 of its potential returns per unit of risk. The Sysage Technology Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  4,715  in Sysage Technology Co on September 22, 2024 and sell it today you would earn a total of  415.00  from holding Sysage Technology Co or generate 8.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

AU Optronics  vs.  Sysage Technology Co

AU Optronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AU Optronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Sysage Technology

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sysage Technology Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Sysage Technology may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with AU Optronics and Sysage Technology

The main advantage of trading using opposite AU Optronics and Sysage Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AU Optronics position performs unexpectedly, Sysage Technology 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 Sysage Technology will offset losses from the drop in Sysage Technology's long position.

The idea behind AU Optronics and Sysage Technology Co 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.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.