Correlation Between Elite Material and Accton Technology
Can any of the company-specific risk be diversified away by investing in both Elite Material and Accton 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 Elite Material and Accton Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elite Material Co and Accton Technology Corp, you can compare the effects of market volatilities on Elite Material and Accton 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 Elite Material with a short position of Accton Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elite Material and Accton Technology.
Diversification Opportunities for Elite Material and Accton Technology
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Elite and Accton is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Elite Material Co and Accton Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accton Technology Corp and Elite Material 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 Elite Material Co are associated (or correlated) with Accton Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accton Technology Corp has no effect on the direction of Elite Material i.e., Elite Material and Accton Technology go up and down completely randomly.
Pair Corralation between Elite Material and Accton Technology
Assuming the 90 days trading horizon Elite Material Co is expected to generate 1.13 times more return on investment than Accton Technology. However, Elite Material is 1.13 times more volatile than Accton Technology Corp. It trades about 0.08 of its potential returns per unit of risk. Accton Technology Corp is currently generating about 0.08 per unit of risk. If you would invest 23,050 in Elite Material Co on August 31, 2024 and sell it today you would earn a total of 23,800 from holding Elite Material Co or generate 103.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Elite Material Co vs. Accton Technology Corp
Performance |
| Timeline |
| Elite Material |
| Accton Technology Corp |
Elite Material and Accton Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elite Material and Accton Technology
The main advantage of trading using opposite Elite Material and Accton Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elite Material position performs unexpectedly, Accton 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 Accton Technology will offset losses from the drop in Accton Technology's long position.| Elite Material vs. Compeq Manufacturing Co | Elite Material vs. ITEQ Corp | Elite Material vs. Unimicron Technology Corp | Elite Material vs. Chicony Electronics Co |
| Accton Technology vs. D Link Corp | Accton Technology vs. Realtek Semiconductor Corp | Accton Technology vs. Winbond Electronics Corp | Accton Technology vs. Compal Electronics |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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