Correlation Between Chicony Electronics and Accton Technology
Can any of the company-specific risk be diversified away by investing in both Chicony Electronics 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 Chicony Electronics and Accton Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chicony Electronics Co and Accton Technology Corp, you can compare the effects of market volatilities on Chicony Electronics 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 Chicony Electronics with a short position of Accton Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicony Electronics and Accton Technology.
Diversification Opportunities for Chicony Electronics and Accton Technology
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chicony and Accton is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Chicony Electronics 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 Chicony Electronics 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 Chicony Electronics 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 Chicony Electronics i.e., Chicony Electronics and Accton Technology go up and down completely randomly.
Pair Corralation between Chicony Electronics and Accton Technology
Assuming the 90 days trading horizon Chicony Electronics is expected to generate 1.68 times less return on investment than Accton Technology. But when comparing it to its historical volatility, Chicony Electronics Co is 1.28 times less risky than Accton Technology. It trades about 0.06 of its potential returns per unit of risk. Accton Technology Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 33,305 in Accton Technology Corp on August 31, 2024 and sell it today you would earn a total of 32,395 from holding Accton Technology Corp or generate 97.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Chicony Electronics Co vs. Accton Technology Corp
Performance |
| Timeline |
| Chicony Electronics |
| Accton Technology Corp |
Chicony Electronics and Accton Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chicony Electronics and Accton Technology
The main advantage of trading using opposite Chicony Electronics and Accton Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicony Electronics 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.The idea behind Chicony Electronics Co and Accton Technology Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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