Correlation Between Accton Technology and China Steel
Can any of the company-specific risk be diversified away by investing in both Accton Technology and China Steel 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 Accton Technology and China Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accton Technology Corp and China Steel Corp, you can compare the effects of market volatilities on Accton Technology and China Steel 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 Accton Technology with a short position of China Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accton Technology and China Steel.
Diversification Opportunities for Accton Technology and China Steel
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Accton and China is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Accton Technology Corp and China Steel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Steel Corp and Accton Technology 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 Accton Technology Corp are associated (or correlated) with China Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Steel Corp has no effect on the direction of Accton Technology i.e., Accton Technology and China Steel go up and down completely randomly.
Pair Corralation between Accton Technology and China Steel
Assuming the 90 days trading horizon Accton Technology Corp is expected to generate 1.6 times more return on investment than China Steel. However, Accton Technology is 1.6 times more volatile than China Steel Corp. It trades about -0.01 of its potential returns per unit of risk. China Steel Corp is currently generating about -0.06 per unit of risk. If you would invest 74,200 in Accton Technology Corp on October 20, 2024 and sell it today you would lose (800.00) from holding Accton Technology Corp or give up 1.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Accton Technology Corp vs. China Steel Corp
Performance |
| Timeline |
| Accton Technology Corp |
| China Steel Corp |
Accton Technology and China Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accton Technology and China Steel
The main advantage of trading using opposite Accton Technology and China Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accton Technology position performs unexpectedly, China Steel 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 China Steel will offset losses from the drop in China Steel's long position.| Accton Technology vs. D Link Corp | Accton Technology vs. Realtek Semiconductor Corp | Accton Technology vs. Winbond Electronics Corp | Accton Technology vs. Compal Electronics |
| China Steel vs. Formosa Plastics Corp | China Steel vs. Chunghwa Telecom Co | China Steel vs. Nan Ya Plastics | China Steel vs. Cathay Financial Holding |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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