Correlation Between AAEON Technology and Axiomtek
Can any of the company-specific risk be diversified away by investing in both AAEON Technology and Axiomtek 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 AAEON Technology and Axiomtek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAEON Technology and Axiomtek Co, you can compare the effects of market volatilities on AAEON Technology and Axiomtek 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 AAEON Technology with a short position of Axiomtek. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAEON Technology and Axiomtek.
Diversification Opportunities for AAEON Technology and Axiomtek
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AAEON and Axiomtek is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding AAEON Technology and Axiomtek Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axiomtek and AAEON 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 AAEON Technology are associated (or correlated) with Axiomtek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axiomtek has no effect on the direction of AAEON Technology i.e., AAEON Technology and Axiomtek go up and down completely randomly.
Pair Corralation between AAEON Technology and Axiomtek
Assuming the 90 days trading horizon AAEON Technology is expected to under-perform the Axiomtek. But the stock apears to be less risky and, when comparing its historical volatility, AAEON Technology is 1.48 times less risky than Axiomtek. The stock trades about -0.16 of its potential returns per unit of risk. The Axiomtek Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 9,940 in Axiomtek Co on August 31, 2024 and sell it today you would earn a total of 710.00 from holding Axiomtek Co or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AAEON Technology vs. Axiomtek Co
Performance |
| Timeline |
| AAEON Technology |
| Axiomtek |
AAEON Technology and Axiomtek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAEON Technology and Axiomtek
The main advantage of trading using opposite AAEON Technology and Axiomtek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAEON Technology position performs unexpectedly, Axiomtek 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 Axiomtek will offset losses from the drop in Axiomtek's long position.| AAEON Technology vs. Quanta Computer | AAEON Technology vs. Wiwynn Corp | AAEON Technology vs. Getac Technology Corp | AAEON Technology vs. InnoDisk |
| Axiomtek vs. Solar Applied Materials | Axiomtek vs. Niching Industrial | Axiomtek vs. Shih Kuen Plastics | Axiomtek vs. Eternal Materials Co |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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