Correlation Between Cipherlab and Accton Technology
Can any of the company-specific risk be diversified away by investing in both Cipherlab 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 Cipherlab and Accton Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cipherlab Co and Accton Technology Corp, you can compare the effects of market volatilities on Cipherlab 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 Cipherlab with a short position of Accton Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cipherlab and Accton Technology.
Diversification Opportunities for Cipherlab and Accton Technology
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cipherlab and Accton is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Cipherlab Co 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 Cipherlab 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 Cipherlab Co 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 Cipherlab i.e., Cipherlab and Accton Technology go up and down completely randomly.
Pair Corralation between Cipherlab and Accton Technology
Assuming the 90 days trading horizon Cipherlab is expected to generate 2.17 times less return on investment than Accton Technology. In addition to that, Cipherlab is 1.11 times more volatile than Accton Technology Corp. It trades about 0.04 of its total potential returns per unit of risk. Accton Technology Corp is currently generating about 0.1 per unit of volatility. If you would invest 23,985 in Accton Technology Corp on September 25, 2024 and sell it today you would earn a total of 51,515 from holding Accton Technology Corp or generate 214.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 99.79% |
Values | Daily Returns |
Cipherlab Co vs. Accton Technology Corp
Performance |
Timeline |
Cipherlab |
Accton Technology Corp |
Cipherlab and Accton Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cipherlab and Accton Technology
The main advantage of trading using opposite Cipherlab and Accton Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cipherlab 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.Cipherlab vs. GeoVision | Cipherlab vs. Flytech Technology Co | Cipherlab vs. Quanta Storage | Cipherlab vs. Coretronic |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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