Correlation Between Accton Technology and D Link
Can any of the company-specific risk be diversified away by investing in both Accton Technology and D Link 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 D Link 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 D Link Corp, you can compare the effects of market volatilities on Accton Technology and D Link 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 D Link. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accton Technology and D Link.
Diversification Opportunities for Accton Technology and D Link
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Accton and 2332 is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Accton Technology Corp and D Link Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on D Link 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 D Link. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of D Link Corp has no effect on the direction of Accton Technology i.e., Accton Technology and D Link go up and down completely randomly.
Pair Corralation between Accton Technology and D Link
Assuming the 90 days trading horizon Accton Technology Corp is expected to generate 1.55 times more return on investment than D Link. However, Accton Technology is 1.55 times more volatile than D Link Corp. It trades about 0.04 of its potential returns per unit of risk. D Link Corp is currently generating about 0.04 per unit of risk. If you would invest 53,800 in Accton Technology Corp on August 24, 2024 and sell it today you would earn a total of 9,200 from holding Accton Technology Corp or generate 17.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Accton Technology Corp vs. D Link Corp
Performance |
| Timeline |
| Accton Technology Corp |
| D Link Corp |
Accton Technology and D Link Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accton Technology and D Link
The main advantage of trading using opposite Accton Technology and D Link positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accton Technology position performs unexpectedly, D Link 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 D Link will offset losses from the drop in D Link'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 |
| D Link vs. Accton Technology Corp | D Link vs. Compal Electronics | D Link vs. Qisda Corp | D Link vs. Macronix International Co |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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