Correlation Between BizLink Holding and Actron Technology
Can any of the company-specific risk be diversified away by investing in both BizLink Holding and Actron 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 BizLink Holding and Actron Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BizLink Holding and Actron Technology, you can compare the effects of market volatilities on BizLink Holding and Actron 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 BizLink Holding with a short position of Actron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of BizLink Holding and Actron Technology.
Diversification Opportunities for BizLink Holding and Actron Technology
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BizLink and Actron is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding BizLink Holding and Actron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Actron Technology and BizLink Holding 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 BizLink Holding are associated (or correlated) with Actron Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Actron Technology has no effect on the direction of BizLink Holding i.e., BizLink Holding and Actron Technology go up and down completely randomly.
Pair Corralation between BizLink Holding and Actron Technology
Assuming the 90 days trading horizon BizLink Holding is expected to generate 3.79 times more return on investment than Actron Technology. However, BizLink Holding is 3.79 times more volatile than Actron Technology. It trades about 0.41 of its potential returns per unit of risk. Actron Technology is currently generating about -0.02 per unit of risk. If you would invest 46,900 in BizLink Holding on September 2, 2024 and sell it today you would earn a total of 17,800 from holding BizLink Holding or generate 37.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BizLink Holding vs. Actron Technology
Performance |
| Timeline |
| BizLink Holding |
| Actron Technology |
BizLink Holding and Actron Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BizLink Holding and Actron Technology
The main advantage of trading using opposite BizLink Holding and Actron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BizLink Holding position performs unexpectedly, Actron 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 Actron Technology will offset losses from the drop in Actron Technology's long position.| BizLink Holding vs. Hota Industrial Mfg | BizLink Holding vs. Chroma ATE | BizLink Holding vs. Sinbon Electronics Co | BizLink Holding vs. Tong Hsing Electronic |
| Actron Technology vs. Hota Industrial Mfg | Actron Technology vs. BizLink Holding | Actron Technology vs. Cub Elecparts | Actron Technology vs. Hu Lane Associate |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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