Correlation Between Accton Technology and Hsin Ba

Can any of the company-specific risk be diversified away by investing in both Accton Technology and Hsin Ba 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 Hsin Ba 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 Hsin Ba Ba, you can compare the effects of market volatilities on Accton Technology and Hsin Ba 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 Hsin Ba. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accton Technology and Hsin Ba.

Diversification Opportunities for Accton Technology and Hsin Ba

0.12

Correlation Coefficient

Accton Technology  Hsin Ba

Average diversification

The 3 months correlation between Accton and Hsin is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Accton Technology Corp and Hsin Ba Ba in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hsin Ba Ba 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 Hsin Ba. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hsin Ba Ba has no effect on the direction of Accton Technology i.e., Accton Technology and Hsin Ba go up and down completely randomly.

Pair Corralation between Accton Technology and Hsin Ba

Assuming the 90 days trading horizon Accton Technology Corp is expected to under-perform the Hsin Ba. In addition to that, Accton Technology is 1.24 times more volatile than Hsin Ba Ba. It trades about -0.13 of its total potential returns per unit of risk. Hsin Ba Ba is currently generating about -0.08 per unit of volatility. If you would invest  12,050  in Hsin Ba Ba on December 30, 2024 and sell it today you would lose (1,300) from holding Hsin Ba Ba or give up 10.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Accton Technology Corp  vs.  Hsin Ba Ba

Accton Technology Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Accton Technology Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Hsin Ba Ba

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hsin Ba Ba has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Accton Technology and Hsin Ba

The main advantage of trading using opposite Accton Technology and Hsin Ba positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accton Technology position performs unexpectedly, Hsin Ba 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 Hsin Ba will offset losses from the drop in Hsin Ba's long position.

The idea behind Accton Technology Corp and Hsin Ba Ba pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.