Correlation Between Accton Technology and OBI Pharma
Can any of the company-specific risk be diversified away by investing in both Accton Technology and OBI Pharma 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 OBI Pharma 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 OBI Pharma, you can compare the effects of market volatilities on Accton Technology and OBI Pharma 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 OBI Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accton Technology and OBI Pharma.
Diversification Opportunities for Accton Technology and OBI Pharma
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Accton and OBI is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Accton Technology Corp and OBI Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OBI Pharma 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 OBI Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OBI Pharma has no effect on the direction of Accton Technology i.e., Accton Technology and OBI Pharma go up and down completely randomly.
Pair Corralation between Accton Technology and OBI Pharma
Assuming the 90 days trading horizon Accton Technology Corp is expected to generate 2.08 times more return on investment than OBI Pharma. However, Accton Technology is 2.08 times more volatile than OBI Pharma. It trades about 0.18 of its potential returns per unit of risk. OBI Pharma is currently generating about -0.13 per unit of risk. If you would invest 57,300 in Accton Technology Corp on August 29, 2024 and sell it today you would earn a total of 5,900 from holding Accton Technology Corp or generate 10.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Accton Technology Corp vs. OBI Pharma
Performance |
| Timeline |
| Accton Technology Corp |
| OBI Pharma |
Accton Technology and OBI Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accton Technology and OBI Pharma
The main advantage of trading using opposite Accton Technology and OBI Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accton Technology position performs unexpectedly, OBI Pharma 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 OBI Pharma will offset losses from the drop in OBI Pharma's long position.| Accton Technology vs. Novatek Microelectronics Corp | Accton Technology vs. Sitronix Technology Corp | Accton Technology vs. Elan Microelectronics Corp | Accton Technology vs. Global Unichip Corp |
| OBI Pharma vs. TaiMed Biologics | OBI Pharma vs. PharmaEngine | OBI Pharma vs. Medigen Biotechnology | OBI Pharma vs. TTY Biopharm 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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