Correlation Between Aker Technology and Chia Yi

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

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

Diversification Opportunities for Aker Technology and Chia Yi

0.35

Correlation Coefficient

Aker Technology  Chia Yi

Weak diversification

The 3 months correlation between Aker and Chia is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Aker Technology Co and Chia Yi Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chia Yi Steel and Aker 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 Aker Technology Co are associated (or correlated) with Chia Yi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chia Yi Steel has no effect on the direction of Aker Technology i.e., Aker Technology and Chia Yi go up and down completely randomly.

Pair Corralation between Aker Technology and Chia Yi

Assuming the 90 days trading horizon Aker Technology Co is expected to under-perform the Chia Yi. In addition to that, Aker Technology is 1.39 times more volatile than Chia Yi Steel. It trades about -0.28 of its total potential returns per unit of risk. Chia Yi Steel is currently generating about 0.02 per unit of volatility. If you would invest  1,100  in Chia Yi Steel on October 6, 2024 and sell it today you would earn a total of  5.00  from holding Chia Yi Steel or generate 0.45% return on investment over 90 days.

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

Aker Technology Co  vs.  Chia Yi Steel

Aker Technology

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aker Technology Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Aker Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Chia Yi Steel

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Chia Yi Steel are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Chia Yi may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Aker Technology and Chia Yi

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

The idea behind Aker Technology Co and Chia Yi Steel 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.