Correlation Between Taiwan Weighted and Accton Technology
Can any of the company-specific risk be diversified away by investing in both Taiwan Weighted and Accton 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 Taiwan Weighted and Accton Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Weighted and Accton Technology Corp, you can compare the effects of market volatilities on Taiwan Weighted and Accton 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 Taiwan Weighted with a short position of Accton Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Weighted and Accton Technology.
Diversification Opportunities for Taiwan Weighted and Accton Technology
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Taiwan and Accton is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Weighted and Accton Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accton Technology Corp and Taiwan Weighted 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 Taiwan Weighted are associated (or correlated) with Accton Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accton Technology Corp has no effect on the direction of Taiwan Weighted i.e., Taiwan Weighted and Accton Technology go up and down completely randomly.
Pair Corralation between Taiwan Weighted and Accton Technology
Assuming the 90 days trading horizon Taiwan Weighted is expected to under-perform the Accton Technology. But the index apears to be less risky and, when comparing its historical volatility, Taiwan Weighted is 2.68 times less risky than Accton Technology. The index trades about -0.11 of its potential returns per unit of risk. The Accton Technology Corp is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 55,200 in Accton Technology Corp on August 31, 2024 and sell it today you would earn a total of 9,500 from holding Accton Technology Corp or generate 17.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Taiwan Weighted vs. Accton Technology Corp
Performance |
| Timeline |
Taiwan Weighted and Accton Technology Volatility Contrast
Predicted Return Density |
| Returns |
Taiwan Weighted
Pair trading matchups for Taiwan Weighted
Accton Technology Corp
Pair trading matchups for Accton Technology
Pair Trading with Taiwan Weighted and Accton Technology
The main advantage of trading using opposite Taiwan Weighted and Accton Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Weighted position performs unexpectedly, Accton 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 Accton Technology will offset losses from the drop in Accton Technology's long position.| Taiwan Weighted vs. Level Biotechnology | Taiwan Weighted vs. Hsin Kuang Steel | Taiwan Weighted vs. China Steel Corp | Taiwan Weighted vs. Sunmax Biotechnology Co |
| Accton Technology vs. D Link Corp | Accton Technology vs. Realtek Semiconductor Corp | Accton Technology vs. Winbond Electronics Corp | Accton Technology vs. Compal Electronics |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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