Correlation Between Accton Technology and Nan Yang
Can any of the company-specific risk be diversified away by investing in both Accton Technology and Nan Yang 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 Accton Technology and Nan Yang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accton Technology Corp and Nan Yang Dyeing, you can compare the effects of market volatilities on Accton Technology and Nan Yang 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 Accton Technology with a short position of Nan Yang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accton Technology and Nan Yang.
Diversification Opportunities for Accton Technology and Nan Yang
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Accton and Nan is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Accton Technology Corp and Nan Yang Dyeing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nan Yang Dyeing and Accton 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 Accton Technology Corp are associated (or correlated) with Nan Yang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nan Yang Dyeing has no effect on the direction of Accton Technology i.e., Accton Technology and Nan Yang go up and down completely randomly.
Pair Corralation between Accton Technology and Nan Yang
Assuming the 90 days trading horizon Accton Technology Corp is expected to generate 3.42 times more return on investment than Nan Yang. However, Accton Technology is 3.42 times more volatile than Nan Yang Dyeing. It trades about 0.07 of its potential returns per unit of risk. Nan Yang Dyeing is currently generating about -0.02 per unit of risk. If you would invest 53,200 in Accton Technology Corp on October 3, 2024 and sell it today you would earn a total of 24,100 from holding Accton Technology Corp or generate 45.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 99.62% |
Values | Daily Returns |
Accton Technology Corp vs. Nan Yang Dyeing
Performance |
Timeline |
Accton Technology Corp |
Nan Yang Dyeing |
Accton Technology and Nan Yang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Accton Technology and Nan Yang
The main advantage of trading using opposite Accton Technology and Nan Yang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accton Technology position performs unexpectedly, Nan Yang 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 Nan Yang will offset losses from the drop in Nan Yang's long position.Accton Technology vs. D Link Corp | Accton Technology vs. Realtek Semiconductor Corp | Accton Technology vs. Winbond Electronics Corp | Accton Technology vs. Compal Electronics |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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