Correlation Between Applied Opt and ChipMOS Technologies
Can any of the company-specific risk be diversified away by investing in both Applied Opt and ChipMOS Technologies 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 Applied Opt and ChipMOS Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Opt and ChipMOS Technologies, you can compare the effects of market volatilities on Applied Opt and ChipMOS Technologies 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 Applied Opt with a short position of ChipMOS Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Opt and ChipMOS Technologies.
Diversification Opportunities for Applied Opt and ChipMOS Technologies
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Applied and ChipMOS is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Applied Opt and ChipMOS Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChipMOS Technologies and Applied Opt 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 Applied Opt are associated (or correlated) with ChipMOS Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChipMOS Technologies has no effect on the direction of Applied Opt i.e., Applied Opt and ChipMOS Technologies go up and down completely randomly.
Pair Corralation between Applied Opt and ChipMOS Technologies
Given the investment horizon of 90 days Applied Opt is expected to generate 3.16 times more return on investment than ChipMOS Technologies. However, Applied Opt is 3.16 times more volatile than ChipMOS Technologies. It trades about 0.22 of its potential returns per unit of risk. ChipMOS Technologies is currently generating about 0.14 per unit of risk. If you would invest 1,256 in Applied Opt on April 25, 2025 and sell it today you would earn a total of 1,410 from holding Applied Opt or generate 112.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Applied Opt vs. ChipMOS Technologies
Performance |
Timeline |
Applied Opt |
ChipMOS Technologies |
Applied Opt and ChipMOS Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Applied Opt and ChipMOS Technologies
The main advantage of trading using opposite Applied Opt and ChipMOS Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Opt position performs unexpectedly, ChipMOS Technologies 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 ChipMOS Technologies will offset losses from the drop in ChipMOS Technologies' long position.Applied Opt vs. Lumentum Holdings | Applied Opt vs. Ichor Holdings | Applied Opt vs. Fabrinet | Applied Opt vs. Hello Group |
ChipMOS Technologies vs. Amkor Technology | ChipMOS Technologies vs. ASE Industrial Holding | ChipMOS Technologies vs. Diodes Incorporated | ChipMOS Technologies vs. Himax Technologies |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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