Correlation Between Accton Technology and Gemtek Technology
Can any of the company-specific risk be diversified away by investing in both Accton Technology and Gemtek Technology 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 Gemtek Technology 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 Gemtek Technology Co, you can compare the effects of market volatilities on Accton Technology and Gemtek Technology 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 Gemtek Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accton Technology and Gemtek Technology.
Diversification Opportunities for Accton Technology and Gemtek Technology
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Accton and Gemtek is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Accton Technology Corp and Gemtek Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gemtek Technology 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 Gemtek Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gemtek Technology has no effect on the direction of Accton Technology i.e., Accton Technology and Gemtek Technology go up and down completely randomly.
Pair Corralation between Accton Technology and Gemtek Technology
Assuming the 90 days trading horizon Accton Technology Corp is expected to generate 1.17 times more return on investment than Gemtek Technology. However, Accton Technology is 1.17 times more volatile than Gemtek Technology Co. It trades about 0.06 of its potential returns per unit of risk. Gemtek Technology Co is currently generating about 0.0 per unit of risk. If you would invest 50,800 in Accton Technology Corp on August 29, 2024 and sell it today you would earn a total of 12,400 from holding Accton Technology Corp or generate 24.41% 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. Gemtek Technology Co
Performance |
| Timeline |
| Accton Technology Corp |
| Gemtek Technology |
Accton Technology and Gemtek Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accton Technology and Gemtek Technology
The main advantage of trading using opposite Accton Technology and Gemtek Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accton Technology position performs unexpectedly, Gemtek Technology 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 Gemtek Technology will offset losses from the drop in Gemtek Technology'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 |
| Gemtek Technology vs. D Link Corp | Gemtek Technology vs. Sunplus Technology Co | Gemtek Technology vs. Silitech Technology Corp | Gemtek Technology vs. Zinwell |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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