Correlation Between Accton Technology and Advanced Ceramic
Can any of the company-specific risk be diversified away by investing in both Accton Technology and Advanced Ceramic 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 Advanced Ceramic 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 Advanced Ceramic X, you can compare the effects of market volatilities on Accton Technology and Advanced Ceramic 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 Advanced Ceramic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accton Technology and Advanced Ceramic.
Diversification Opportunities for Accton Technology and Advanced Ceramic
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Accton and Advanced is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Accton Technology Corp and Advanced Ceramic X in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Ceramic X 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 Advanced Ceramic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Ceramic X has no effect on the direction of Accton Technology i.e., Accton Technology and Advanced Ceramic go up and down completely randomly.
Pair Corralation between Accton Technology and Advanced Ceramic
Assuming the 90 days trading horizon Accton Technology Corp is expected to generate 0.95 times more return on investment than Advanced Ceramic. However, Accton Technology Corp is 1.05 times less risky than Advanced Ceramic. It trades about 0.2 of its potential returns per unit of risk. Advanced Ceramic X is currently generating about -0.01 per unit of risk. If you would invest 57,000 in Accton Technology Corp on August 25, 2024 and sell it today you would earn a total of 7,000 from holding Accton Technology Corp or generate 12.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Accton Technology Corp vs. Advanced Ceramic X
Performance |
| Timeline |
| Accton Technology Corp |
| Advanced Ceramic X |
Accton Technology and Advanced Ceramic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accton Technology and Advanced Ceramic
The main advantage of trading using opposite Accton Technology and Advanced Ceramic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accton Technology position performs unexpectedly, Advanced Ceramic 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 Advanced Ceramic will offset losses from the drop in Advanced Ceramic's long position.| Accton Technology vs. Novatek Microelectronics Corp | Accton Technology vs. Quanta Computer | Accton Technology vs. United Microelectronics |
| Advanced Ceramic vs. Accton Technology Corp | Advanced Ceramic vs. Arcadyan Technology Corp | Advanced Ceramic vs. Gemtek Technology 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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