Correlation Between Accton Technology and Evergreen Marine
Can any of the company-specific risk be diversified away by investing in both Accton Technology and Evergreen Marine 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 Evergreen Marine 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 Evergreen Marine Corp, you can compare the effects of market volatilities on Accton Technology and Evergreen Marine 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 Evergreen Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accton Technology and Evergreen Marine.
Diversification Opportunities for Accton Technology and Evergreen Marine
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Accton and Evergreen is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Accton Technology Corp and Evergreen Marine Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evergreen Marine Corp 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 Evergreen Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evergreen Marine Corp has no effect on the direction of Accton Technology i.e., Accton Technology and Evergreen Marine go up and down completely randomly.
Pair Corralation between Accton Technology and Evergreen Marine
Assuming the 90 days trading horizon Accton Technology Corp is expected to generate 1.13 times more return on investment than Evergreen Marine. However, Accton Technology is 1.13 times more volatile than Evergreen Marine Corp. It trades about 0.21 of its potential returns per unit of risk. Evergreen Marine Corp is currently generating about 0.07 per unit of risk. If you would invest 55,000 in Accton Technology Corp on September 25, 2024 and sell it today you would earn a total of 21,300 from holding Accton Technology Corp or generate 38.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Accton Technology Corp vs. Evergreen Marine Corp
Performance |
Timeline |
Accton Technology Corp |
Evergreen Marine Corp |
Accton Technology and Evergreen Marine Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Accton Technology and Evergreen Marine
The main advantage of trading using opposite Accton Technology and Evergreen Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accton Technology position performs unexpectedly, Evergreen Marine 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 Evergreen Marine will offset losses from the drop in Evergreen Marine's long position.Accton Technology vs. Century Wind Power | Accton Technology vs. Green World Fintech | Accton Technology vs. Ingentec | Accton Technology vs. Chaheng Precision Co |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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