Correlation Between Accton Technology and Kaori Heat
Can any of the company-specific risk be diversified away by investing in both Accton Technology and Kaori Heat 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 Kaori Heat 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 Kaori Heat Treatment, you can compare the effects of market volatilities on Accton Technology and Kaori Heat 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 Kaori Heat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accton Technology and Kaori Heat.
Diversification Opportunities for Accton Technology and Kaori Heat
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Accton and Kaori is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Accton Technology Corp and Kaori Heat Treatment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaori Heat Treatment 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 Kaori Heat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaori Heat Treatment has no effect on the direction of Accton Technology i.e., Accton Technology and Kaori Heat go up and down completely randomly.
Pair Corralation between Accton Technology and Kaori Heat
Assuming the 90 days trading horizon Accton Technology is expected to generate 1.41 times less return on investment than Kaori Heat. But when comparing it to its historical volatility, Accton Technology Corp is 1.43 times less risky than Kaori Heat. It trades about 0.05 of its potential returns per unit of risk. Kaori Heat Treatment is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 26,300 in Kaori Heat Treatment on September 2, 2024 and sell it today you would earn a total of 7,650 from holding Kaori Heat Treatment or generate 29.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Accton Technology Corp vs. Kaori Heat Treatment
Performance |
| Timeline |
| Accton Technology Corp |
| Kaori Heat Treatment |
Accton Technology and Kaori Heat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accton Technology and Kaori Heat
The main advantage of trading using opposite Accton Technology and Kaori Heat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accton Technology position performs unexpectedly, Kaori Heat 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 Kaori Heat will offset losses from the drop in Kaori Heat'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 |
| Kaori Heat vs. BES Engineering Co | Kaori Heat vs. Continental Holdings Corp | Kaori Heat vs. Kee Tai Properties | Kaori Heat vs. Hung Sheng Construction |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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