Correlation Between Holy Stone and Accton Technology
Can any of the company-specific risk be diversified away by investing in both Holy Stone 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 Holy Stone and Accton Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Holy Stone Enterprise and Accton Technology Corp, you can compare the effects of market volatilities on Holy Stone 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 Holy Stone with a short position of Accton Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holy Stone and Accton Technology.
Diversification Opportunities for Holy Stone and Accton Technology
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Holy and Accton is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Holy Stone Enterprise 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 Holy Stone 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 Holy Stone Enterprise 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 Holy Stone i.e., Holy Stone and Accton Technology go up and down completely randomly.
Pair Corralation between Holy Stone and Accton Technology
Assuming the 90 days trading horizon Holy Stone is expected to generate 1.65 times less return on investment than Accton Technology. But when comparing it to its historical volatility, Holy Stone Enterprise is 4.66 times less risky than Accton Technology. It trades about 0.09 of its potential returns per unit of risk. Accton Technology Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 75,500 in Accton Technology Corp on October 25, 2024 and sell it today you would earn a total of 800.00 from holding Accton Technology Corp or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Holy Stone Enterprise vs. Accton Technology Corp
Performance |
| Timeline |
| Holy Stone Enterprise |
| Accton Technology Corp |
Holy Stone and Accton Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Holy Stone and Accton Technology
The main advantage of trading using opposite Holy Stone and Accton Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holy Stone 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.| Holy Stone vs. Walsin Technology Corp | Holy Stone vs. Yageo Corp | Holy Stone vs. Tripod Technology Corp | Holy Stone vs. Asia Optical 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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