Correlation Between Actron Technology and Te Chang
Can any of the company-specific risk be diversified away by investing in both Actron Technology and Te Chang 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 Actron Technology and Te Chang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Actron Technology and Te Chang Construction, you can compare the effects of market volatilities on Actron Technology and Te Chang 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 Actron Technology with a short position of Te Chang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Actron Technology and Te Chang.
Diversification Opportunities for Actron Technology and Te Chang
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Actron and 5511 is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Actron Technology and Te Chang Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Te Chang Construction and Actron 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 Actron Technology are associated (or correlated) with Te Chang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Te Chang Construction has no effect on the direction of Actron Technology i.e., Actron Technology and Te Chang go up and down completely randomly.
Pair Corralation between Actron Technology and Te Chang
Assuming the 90 days trading horizon Actron Technology is expected to generate 6.0 times less return on investment than Te Chang. In addition to that, Actron Technology is 1.12 times more volatile than Te Chang Construction. It trades about 0.02 of its total potential returns per unit of risk. Te Chang Construction is currently generating about 0.1 per unit of volatility. If you would invest 2,727 in Te Chang Construction on September 3, 2024 and sell it today you would earn a total of 3,453 from holding Te Chang Construction or generate 126.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Actron Technology vs. Te Chang Construction
Performance |
| Timeline |
| Actron Technology |
| Te Chang Construction |
Actron Technology and Te Chang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Actron Technology and Te Chang
The main advantage of trading using opposite Actron Technology and Te Chang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Actron Technology position performs unexpectedly, Te Chang 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 Te Chang will offset losses from the drop in Te Chang's long position.| Actron Technology vs. Te Chang Construction | Actron Technology vs. Chinese Maritime Transport | Actron Technology vs. Lihtai Construction Enterprise | Actron Technology vs. Insyde Software |
| Te Chang vs. Ruentex Engineering Construction | Te Chang vs. Century Wind Power | Te Chang vs. BES Engineering Co | Te Chang vs. Da Cin Construction 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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