Correlation Between Arcadyan Technology and Accton Technology
Can any of the company-specific risk be diversified away by investing in both Arcadyan Technology 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 Arcadyan Technology and Accton Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arcadyan Technology Corp and Accton Technology Corp, you can compare the effects of market volatilities on Arcadyan Technology 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 Arcadyan Technology with a short position of Accton Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arcadyan Technology and Accton Technology.
Diversification Opportunities for Arcadyan Technology and Accton Technology
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Arcadyan and Accton is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Arcadyan Technology Corp 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 Arcadyan 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 Arcadyan Technology Corp 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 Arcadyan Technology i.e., Arcadyan Technology and Accton Technology go up and down completely randomly.
Pair Corralation between Arcadyan Technology and Accton Technology
Assuming the 90 days trading horizon Arcadyan Technology is expected to generate 1.54 times less return on investment than Accton Technology. But when comparing it to its historical volatility, Arcadyan Technology Corp is 1.16 times less risky than Accton Technology. It trades about 0.15 of its potential returns per unit of risk. Accton Technology Corp is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 57,000 in Accton Technology Corp on August 25, 2024 and sell it today you would earn a total of 7,000 from holding Accton Technology Corp or generate 12.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arcadyan Technology Corp vs. Accton Technology Corp
Performance |
| Timeline |
| Arcadyan Technology Corp |
| Accton Technology Corp |
Arcadyan Technology and Accton Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arcadyan Technology and Accton Technology
The main advantage of trading using opposite Arcadyan Technology and Accton Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arcadyan Technology 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.| Arcadyan Technology vs. Sercomm Corp | Arcadyan Technology vs. Wistron NeWeb Corp | Arcadyan Technology vs. Accton Technology Corp | Arcadyan Technology vs. Gemtek Technology Co |
| Accton Technology vs. Novatek Microelectronics Corp | Accton Technology vs. Quanta Computer | Accton Technology vs. United Microelectronics |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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