Correlation Between Acer Incorporated and Legend Holdings
Can any of the company-specific risk be diversified away by investing in both Acer Incorporated and Legend Holdings 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 Acer Incorporated and Legend Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acer Incorporated and Legend Holdings, you can compare the effects of market volatilities on Acer Incorporated and Legend Holdings 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 Acer Incorporated with a short position of Legend Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acer Incorporated and Legend Holdings.
Diversification Opportunities for Acer Incorporated and Legend Holdings
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Acer and Legend is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Acer Incorporated and Legend Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legend Holdings and Acer Incorporated 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 Acer Incorporated are associated (or correlated) with Legend Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legend Holdings has no effect on the direction of Acer Incorporated i.e., Acer Incorporated and Legend Holdings go up and down completely randomly.
Pair Corralation between Acer Incorporated and Legend Holdings
Assuming the 90 days trading horizon Acer Incorporated is expected to under-perform the Legend Holdings. In addition to that, Acer Incorporated is 2.46 times more volatile than Legend Holdings. It trades about -0.16 of its total potential returns per unit of risk. Legend Holdings is currently generating about -0.08 per unit of volatility. If you would invest 88.00 in Legend Holdings on August 31, 2024 and sell it today you would lose (5.00) from holding Legend Holdings or give up 5.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Acer Incorporated vs. Legend Holdings
Performance |
| Timeline |
| Acer Incorporated |
| Legend Holdings |
Acer Incorporated and Legend Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acer Incorporated and Legend Holdings
The main advantage of trading using opposite Acer Incorporated and Legend Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acer Incorporated position performs unexpectedly, Legend Holdings 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 Legend Holdings will offset losses from the drop in Legend Holdings' long position.| Acer Incorporated vs. Arista Networks | Acer Incorporated vs. Seiko Epson | Acer Incorporated vs. Toshiba Tec |
| Legend Holdings vs. Arista Networks | Legend Holdings vs. Seiko Epson | Legend Holdings vs. Acer Incorporated | Legend Holdings vs. Toshiba Tec |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |