Correlation Between WT Microelectronics and AU Optronics
Can any of the company-specific risk be diversified away by investing in both WT Microelectronics 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 WT Microelectronics and AU Optronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WT Microelectronics Co and AU Optronics, you can compare the effects of market volatilities on WT Microelectronics 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 WT Microelectronics with a short position of AU Optronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of WT Microelectronics and AU Optronics.
Diversification Opportunities for WT Microelectronics and AU Optronics
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between 3036 and 2409 is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding WT Microelectronics Co and AU Optronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AU Optronics and WT Microelectronics 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 WT Microelectronics Co 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 WT Microelectronics i.e., WT Microelectronics and AU Optronics go up and down completely randomly.
Pair Corralation between WT Microelectronics and AU Optronics
Assuming the 90 days trading horizon WT Microelectronics Co is expected to under-perform the AU Optronics. In addition to that, WT Microelectronics is 1.25 times more volatile than AU Optronics. It trades about -0.02 of its total potential returns per unit of risk. AU Optronics is currently generating about 0.01 per unit of volatility. If you would invest 1,485 in AU Optronics on December 28, 2024 and sell it today you would earn a total of 5.00 from holding AU Optronics or generate 0.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
WT Microelectronics Co vs. AU Optronics
Performance |
Timeline |
WT Microelectronics |
AU Optronics |
WT Microelectronics and AU Optronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with WT Microelectronics and AU Optronics
The main advantage of trading using opposite WT Microelectronics and AU Optronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WT Microelectronics 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.WT Microelectronics vs. WPG Holdings | WT Microelectronics vs. Novatek Microelectronics Corp | WT Microelectronics vs. King Yuan Electronics | WT Microelectronics vs. Synnex Technology International |
AU Optronics vs. Innolux Corp | AU Optronics vs. United Microelectronics | AU Optronics vs. China Steel Corp | AU Optronics vs. Quanta Computer |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |