Correlation Between Accton Technology and Wonderful
Can any of the company-specific risk be diversified away by investing in both Accton Technology and Wonderful 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 Wonderful 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 Wonderful Hi Tech Co, you can compare the effects of market volatilities on Accton Technology and Wonderful 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 Wonderful. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accton Technology and Wonderful.
Diversification Opportunities for Accton Technology and Wonderful
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Accton and Wonderful is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Accton Technology Corp and Wonderful Hi Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonderful Hi Tech 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 Wonderful. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonderful Hi Tech has no effect on the direction of Accton Technology i.e., Accton Technology and Wonderful go up and down completely randomly.
Pair Corralation between Accton Technology and Wonderful
Assuming the 90 days trading horizon Accton Technology Corp is expected to under-perform the Wonderful. In addition to that, Accton Technology is 2.2 times more volatile than Wonderful Hi Tech Co. It trades about -0.09 of its total potential returns per unit of risk. Wonderful Hi Tech Co is currently generating about 0.49 per unit of volatility. If you would invest 3,375 in Wonderful Hi Tech Co on December 1, 2024 and sell it today you would earn a total of 450.00 from holding Wonderful Hi Tech Co or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Accton Technology Corp vs. Wonderful Hi Tech Co
Performance |
| Timeline |
| Accton Technology Corp |
| Wonderful Hi Tech |
Accton Technology and Wonderful Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accton Technology and Wonderful
The main advantage of trading using opposite Accton Technology and Wonderful positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accton Technology position performs unexpectedly, Wonderful 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 Wonderful will offset losses from the drop in Wonderful'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 |
| Wonderful vs. Chinese Gamer International | Wonderful vs. FarGlory Hotel Co | Wonderful vs. Advanced Wireless Semiconductor | Wonderful vs. Cameo Communications |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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