Correlation Between Accton Technology and U Media
Can any of the company-specific risk be diversified away by investing in both Accton Technology and U Media 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 U Media 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 U Media Communications, you can compare the effects of market volatilities on Accton Technology and U Media 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 U Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accton Technology and U Media.
Diversification Opportunities for Accton Technology and U Media
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Accton and 6470 is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Accton Technology Corp and U Media Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Media Communications 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 U Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Media Communications has no effect on the direction of Accton Technology i.e., Accton Technology and U Media go up and down completely randomly.
Pair Corralation between Accton Technology and U Media
Assuming the 90 days trading horizon Accton Technology Corp is expected to generate 1.26 times more return on investment than U Media. However, Accton Technology is 1.26 times more volatile than U Media Communications. It trades about 0.02 of its potential returns per unit of risk. U Media Communications is currently generating about -0.25 per unit of risk. If you would invest 76,100 in Accton Technology Corp on October 29, 2024 and sell it today you would earn a total of 200.00 from holding Accton Technology Corp or generate 0.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Accton Technology Corp vs. U Media Communications
Performance |
| Timeline |
| Accton Technology Corp |
| U Media Communications |
Accton Technology and U Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accton Technology and U Media
The main advantage of trading using opposite Accton Technology and U Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accton Technology position performs unexpectedly, U Media 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 U Media will offset losses from the drop in U Media'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 |
| U Media vs. Sunspring Metal Corp | U Media vs. Chialin Precision Industrial | U Media vs. Mosa Industrial Corp | U Media vs. Song Ho Industrial |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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