Correlation Between Connection Technology and Accton Technology
Can any of the company-specific risk be diversified away by investing in both Connection 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 Connection 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 Connection Technology Systems and Accton Technology Corp, you can compare the effects of market volatilities on Connection 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 Connection Technology with a short position of Accton Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Connection Technology and Accton Technology.
Diversification Opportunities for Connection Technology and Accton Technology
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Connection and Accton is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Connection Technology Systems 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 Connection 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 Connection Technology Systems 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 Connection Technology i.e., Connection Technology and Accton Technology go up and down completely randomly.
Pair Corralation between Connection Technology and Accton Technology
Assuming the 90 days trading horizon Connection Technology Systems is expected to under-perform the Accton Technology. But the stock apears to be less risky and, when comparing its historical volatility, Connection Technology Systems is 1.48 times less risky than Accton Technology. The stock trades about -0.3 of its potential returns per unit of risk. The Accton Technology Corp is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 72,000 in Accton Technology Corp on October 9, 2024 and sell it today you would earn a total of 5,400 from holding Accton Technology Corp or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Connection Technology Systems vs. Accton Technology Corp
Performance |
| Timeline |
| Connection Technology |
| Accton Technology Corp |
Connection Technology and Accton Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Connection Technology and Accton Technology
The main advantage of trading using opposite Connection Technology and Accton Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Connection 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.| Connection Technology vs. Intai Technology | Connection Technology vs. Central Reinsurance Corp | Connection Technology vs. Alchip Technologies | Connection Technology vs. Healthconn Corp |
| Accton Technology vs. Holy Stone Enterprise | Accton Technology vs. Walsin Technology Corp | Accton Technology vs. Yageo Corp | Accton Technology vs. HannStar Board Corp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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