Correlation Between Acbel Polytech and Primax Electronics
Can any of the company-specific risk be diversified away by investing in both Acbel Polytech and Primax Electronics 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 Primax Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acbel Polytech and Primax Electronics, you can compare the effects of market volatilities on Acbel Polytech and Primax Electronics 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 Primax Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acbel Polytech and Primax Electronics.
Diversification Opportunities for Acbel Polytech and Primax Electronics
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Acbel and Primax is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Acbel Polytech and Primax Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primax Electronics 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 Primax Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primax Electronics has no effect on the direction of Acbel Polytech i.e., Acbel Polytech and Primax Electronics go up and down completely randomly.
Pair Corralation between Acbel Polytech and Primax Electronics
Assuming the 90 days trading horizon Acbel Polytech is expected to under-perform the Primax Electronics. In addition to that, Acbel Polytech is 1.09 times more volatile than Primax Electronics. It trades about -0.03 of its total potential returns per unit of risk. Primax Electronics is currently generating about 0.04 per unit of volatility. If you would invest 6,500 in Primax Electronics on September 3, 2024 and sell it today you would earn a total of 1,390 from holding Primax Electronics or generate 21.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acbel Polytech vs. Primax Electronics
Performance |
| Timeline |
| Acbel Polytech |
| Primax Electronics |
Acbel Polytech and Primax Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acbel Polytech and Primax Electronics
The main advantage of trading using opposite Acbel Polytech and Primax Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acbel Polytech position performs unexpectedly, Primax Electronics 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 Primax Electronics will offset losses from the drop in Primax Electronics' 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 |
| Primax Electronics vs. Flexium Interconnect | Primax Electronics vs. Radiant Opto Electronics Corp | Primax Electronics vs. Merry Electronics Co | Primax Electronics vs. BizLink Holding |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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