Correlation Between Integrated Media and AU Optronics

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

By analyzing existing cross correlation between Integrated Media Technology and AU Optronics Corp, you can compare the effects of market volatilities on Integrated Media 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 Integrated Media with a short position of AU Optronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Media and AU Optronics.

Diversification Opportunities for Integrated Media and AU Optronics

-0.52

Correlation Coefficient

Integrated Media  AU Optronics

Excellent diversification

The 3 months correlation between Integrated and AUOTY is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Media Technology and AU Optronics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AU Optronics Corp and Integrated Media 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 Integrated Media Technology 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 Corp has no effect on the direction of Integrated Media i.e., Integrated Media and AU Optronics go up and down completely randomly.

Pair Corralation between Integrated Media and AU Optronics

If you would invest  125.00  in Integrated Media Technology on September 21, 2024 and sell it today you would lose (4.00) from holding Integrated Media Technology or give up 3.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Integrated Media Technology  vs.  AU Optronics Corp

Integrated Media Tec

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Integrated Media Technology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Integrated Media may actually be approaching a critical reversion point that can send shares even higher in January 2025.

AU Optronics Corp

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with Integrated Media and AU Optronics

The main advantage of trading using opposite Integrated Media and AU Optronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Media 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.

The idea behind Integrated Media Technology and AU Optronics Corp 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.