Correlation Between Aspeed Technology and Accton Technology

Can any of the company-specific risk be diversified away by investing in both Aspeed Technology 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 Aspeed Technology and Accton Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aspeed Technology and Accton Technology Corp, you can compare the effects of market volatilities on Aspeed Technology 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 Aspeed Technology with a short position of Accton Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspeed Technology and Accton Technology.

Diversification Opportunities for Aspeed Technology and Accton Technology

-0.59

Correlation Coefficient

Aspeed Technology  Accton Technology

Excellent diversification

The 3 months correlation between Aspeed and Accton is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Aspeed Technology 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 Aspeed 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 Aspeed Technology 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 Aspeed Technology i.e., Aspeed Technology and Accton Technology go up and down completely randomly.

Pair Corralation between Aspeed Technology and Accton Technology

Assuming the 90 days trading horizon Aspeed Technology is expected to generate 1.29 times more return on investment than Accton Technology. However, Aspeed Technology is 1.29 times more volatile than Accton Technology Corp. It trades about 0.04 of its potential returns per unit of risk. Accton Technology Corp is currently generating about 0.03 per unit of risk. If you would invest  282,809  in Aspeed Technology on December 3, 2024 and sell it today you would earn a total of  65,191  from holding Aspeed Technology or generate 23.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Aspeed Technology  vs.  Accton Technology Corp

Aspeed Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aspeed Technology 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.

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 fairly stable basic indicators, Accton Technology is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Aspeed Technology and Accton Technology

The main advantage of trading using opposite Aspeed Technology and Accton Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspeed Technology 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.

The idea behind Aspeed Technology and Accton Technology Corp 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.