Correlation Between AU Optronics and Bel Fuse

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

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

Diversification Opportunities for AU Optronics and Bel Fuse

0.0

Correlation Coefficient

AU Optronics  Bel Fuse

Pay attention - limited upside

The 3 months correlation between AUOTY and Bel is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AU Optronics Corp and Bel Fuse A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bel Fuse A 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 Corp are associated (or correlated) with Bel Fuse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bel Fuse A has no effect on the direction of AU Optronics i.e., AU Optronics and Bel Fuse go up and down completely randomly.

Pair Corralation between AU Optronics and Bel Fuse

If you would invest (100.00) in AU Optronics Corp on December 27, 2024 and sell it today you would earn a total of  100.00  from holding AU Optronics Corp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

AU Optronics Corp  vs.  Bel Fuse A

AU Optronics Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days AU Optronics Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, AU Optronics is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Bel Fuse A

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bel Fuse A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with AU Optronics and Bel Fuse

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

The idea behind AU Optronics Corp and Bel Fuse A 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.