Correlation Between Tainet Communication and Accton Technology
Can any of the company-specific risk be diversified away by investing in both Tainet Communication 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 Tainet Communication and Accton Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tainet Communication System and Accton Technology Corp, you can compare the effects of market volatilities on Tainet Communication 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 Tainet Communication with a short position of Accton Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tainet Communication and Accton Technology.
Diversification Opportunities for Tainet Communication and Accton Technology
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tainet and Accton is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Tainet Communication System 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 Tainet Communication 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 Tainet Communication System 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 Tainet Communication i.e., Tainet Communication and Accton Technology go up and down completely randomly.
Pair Corralation between Tainet Communication and Accton Technology
Assuming the 90 days trading horizon Tainet Communication is expected to generate 1.71 times less return on investment than Accton Technology. In addition to that, Tainet Communication is 1.04 times more volatile than Accton Technology Corp. It trades about 0.05 of its total potential returns per unit of risk. Accton Technology Corp is currently generating about 0.08 per unit of volatility. If you would invest 25,310 in Accton Technology Corp on August 26, 2024 and sell it today you would earn a total of 38,690 from holding Accton Technology Corp or generate 152.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Tainet Communication System vs. Accton Technology Corp
Performance |
| Timeline |
| Tainet Communication |
| Accton Technology Corp |
Tainet Communication and Accton Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tainet Communication and Accton Technology
The main advantage of trading using opposite Tainet Communication and Accton Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tainet Communication 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.| Tainet Communication vs. Accton Technology Corp | Tainet Communication vs. Arcadyan Technology Corp | Tainet Communication vs. Advanced Ceramic X | Tainet Communication 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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