Correlation Between Acbel Polytech and Gigastorage Corp
Can any of the company-specific risk be diversified away by investing in both Acbel Polytech and Gigastorage Corp 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 Acbel Polytech and Gigastorage Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acbel Polytech and Gigastorage Corp, you can compare the effects of market volatilities on Acbel Polytech and Gigastorage Corp 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 Acbel Polytech with a short position of Gigastorage Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acbel Polytech and Gigastorage Corp.
Diversification Opportunities for Acbel Polytech and Gigastorage Corp
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Acbel and Gigastorage is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Acbel Polytech and Gigastorage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gigastorage Corp and Acbel Polytech 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 Acbel Polytech are associated (or correlated) with Gigastorage Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gigastorage Corp has no effect on the direction of Acbel Polytech i.e., Acbel Polytech and Gigastorage Corp go up and down completely randomly.
Pair Corralation between Acbel Polytech and Gigastorage Corp
Assuming the 90 days trading horizon Acbel Polytech is expected to generate 0.94 times more return on investment than Gigastorage Corp. However, Acbel Polytech is 1.06 times less risky than Gigastorage Corp. It trades about -0.02 of its potential returns per unit of risk. Gigastorage Corp is currently generating about -0.07 per unit of risk. If you would invest 3,750 in Acbel Polytech on August 29, 2024 and sell it today you would lose (360.00) from holding Acbel Polytech or give up 9.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acbel Polytech vs. Gigastorage Corp
Performance |
| Timeline |
| Acbel Polytech |
| Gigastorage Corp |
Acbel Polytech and Gigastorage Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acbel Polytech and Gigastorage Corp
The main advantage of trading using opposite Acbel Polytech and Gigastorage Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acbel Polytech position performs unexpectedly, Gigastorage Corp 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 Gigastorage Corp will offset losses from the drop in Gigastorage Corp's long position.| Acbel Polytech vs. Yulon Motor Co | Acbel Polytech vs. Far Eastern Department | Acbel Polytech vs. China Steel Corp | Acbel Polytech vs. Chang Hwa Commercial |
| Gigastorage Corp vs. Taiwan Mobile Co | Gigastorage Corp vs. Sports Gear Co | Gigastorage Corp vs. Mobiletron Electronics Co | Gigastorage Corp vs. Shiny Chemical Industrial |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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