Correlation Between Accton Technology and Da Li
Can any of the company-specific risk be diversified away by investing in both Accton Technology and Da Li 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 Da Li 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 Da Li Development Co, you can compare the effects of market volatilities on Accton Technology and Da Li 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 Da Li. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accton Technology and Da Li.
Diversification Opportunities for Accton Technology and Da Li
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Accton and 6177 is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Accton Technology Corp and Da Li Development Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Da Li Development 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 Da Li. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Da Li Development has no effect on the direction of Accton Technology i.e., Accton Technology and Da Li go up and down completely randomly.
Pair Corralation between Accton Technology and Da Li
Assuming the 90 days trading horizon Accton Technology Corp is expected to generate 0.97 times more return on investment than Da Li. However, Accton Technology Corp is 1.03 times less risky than Da Li. It trades about 0.06 of its potential returns per unit of risk. Da Li Development Co is currently generating about 0.05 per unit of risk. If you would invest 50,000 in Accton Technology Corp on September 26, 2024 and sell it today you would earn a total of 25,500 from holding Accton Technology Corp or generate 51.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 99.67% |
Values | Daily Returns |
Accton Technology Corp vs. Da Li Development Co
Performance |
Timeline |
Accton Technology Corp |
Da Li Development |
Accton Technology and Da Li Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Accton Technology and Da Li
The main advantage of trading using opposite Accton Technology and Da Li positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accton Technology position performs unexpectedly, Da Li 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 Da Li will offset losses from the drop in Da Li'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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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