Correlation Between AAC Technologies and Aerkomm

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

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

Diversification Opportunities for AAC Technologies and Aerkomm

0.0

Correlation Coefficient

AAC Technologies  Aerkomm

Pay attention - limited upside

The 3 months correlation between AAC and Aerkomm is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AAC Technologies Holdings and Aerkomm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aerkomm and AAC Technologies 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 AAC Technologies Holdings are associated (or correlated) with Aerkomm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aerkomm has no effect on the direction of AAC Technologies i.e., AAC Technologies and Aerkomm go up and down completely randomly.

Pair Corralation between AAC Technologies and Aerkomm

If you would invest  482.00  in AAC Technologies Holdings on December 27, 2024 and sell it today you would earn a total of  145.00  from holding AAC Technologies Holdings or generate 30.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

AAC Technologies Holdings  vs.  Aerkomm

AAC Technologies Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AAC Technologies Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, AAC Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Aerkomm

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aerkomm has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Aerkomm is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with AAC Technologies and Aerkomm

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

The idea behind AAC Technologies Holdings and Aerkomm 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 Stocks Directory module to find actively traded stocks across global markets.