Correlation Between Accton Technology and Castles Technology
Can any of the company-specific risk be diversified away by investing in both Accton Technology and Castles 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 Castles 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 Castles Technology Co, you can compare the effects of market volatilities on Accton Technology and Castles 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 Castles Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accton Technology and Castles Technology.
Diversification Opportunities for Accton Technology and Castles Technology
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Accton and Castles is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Accton Technology Corp and Castles Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castles 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 Castles Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castles Technology has no effect on the direction of Accton Technology i.e., Accton Technology and Castles Technology go up and down completely randomly.
Pair Corralation between Accton Technology and Castles Technology
Assuming the 90 days trading horizon Accton Technology Corp is expected to under-perform the Castles Technology. In addition to that, Accton Technology is 1.31 times more volatile than Castles Technology Co. It trades about -0.06 of its total potential returns per unit of risk. Castles Technology Co is currently generating about -0.02 per unit of volatility. If you would invest 8,150 in Castles Technology Co on October 14, 2024 and sell it today you would lose (60.00) from holding Castles Technology Co or give up 0.74% 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. Castles Technology Co
Performance |
| Timeline |
| Accton Technology Corp |
| Castles Technology |
Accton Technology and Castles Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accton Technology and Castles Technology
The main advantage of trading using opposite Accton Technology and Castles Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accton Technology position performs unexpectedly, Castles 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 Castles Technology will offset losses from the drop in Castles Technology'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 |
| Castles Technology vs. AVerMedia Technologies | Castles Technology vs. Min Aik Technology | Castles Technology vs. Jean Co | Castles Technology vs. Uniform Industrial Corp |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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