Correlation Between Acbel Polytech and FSP Technology
Can any of the company-specific risk be diversified away by investing in both Acbel Polytech and FSP 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 Acbel Polytech and FSP Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acbel Polytech and FSP Technology, you can compare the effects of market volatilities on Acbel Polytech and FSP 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 Acbel Polytech with a short position of FSP Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acbel Polytech and FSP Technology.
Diversification Opportunities for Acbel Polytech and FSP Technology
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Acbel and FSP is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Acbel Polytech and FSP Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FSP Technology 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 FSP Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FSP Technology has no effect on the direction of Acbel Polytech i.e., Acbel Polytech and FSP Technology go up and down completely randomly.
Pair Corralation between Acbel Polytech and FSP Technology
Assuming the 90 days trading horizon Acbel Polytech is expected to under-perform the FSP Technology. But the stock apears to be less risky and, when comparing its historical volatility, Acbel Polytech is 1.5 times less risky than FSP Technology. The stock trades about -0.04 of its potential returns per unit of risk. The FSP Technology is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 6,010 in FSP Technology on October 25, 2024 and sell it today you would earn a total of 490.00 from holding FSP Technology or generate 8.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acbel Polytech vs. FSP Technology
Performance |
| Timeline |
| Acbel Polytech |
| FSP Technology |
Acbel Polytech and FSP Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acbel Polytech and FSP Technology
The main advantage of trading using opposite Acbel Polytech and FSP Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acbel Polytech position performs unexpectedly, FSP 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 FSP Technology will offset losses from the drop in FSP Technology's long position.| Acbel Polytech vs. Cheng Uei Precision | Acbel Polytech vs. Gemtek Technology Co | Acbel Polytech vs. Kinpo Electronics | Acbel Polytech vs. Darfon Electronics Corp |
| FSP Technology vs. Wah Lee Industrial | FSP Technology vs. Sinbon Electronics Co | FSP Technology vs. Acbel Polytech | FSP Technology vs. TXC 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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