Correlation Between Great Wall and AVerMedia Technologies
Can any of the company-specific risk be diversified away by investing in both Great Wall and AVerMedia Technologies 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 Great Wall and AVerMedia Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Wall Enterprise and AVerMedia Technologies, you can compare the effects of market volatilities on Great Wall and AVerMedia Technologies 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 Great Wall with a short position of AVerMedia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Wall and AVerMedia Technologies.
Diversification Opportunities for Great Wall and AVerMedia Technologies
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Great and AVerMedia is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Great Wall Enterprise and AVerMedia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVerMedia Technologies and Great Wall 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 Great Wall Enterprise are associated (or correlated) with AVerMedia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVerMedia Technologies has no effect on the direction of Great Wall i.e., Great Wall and AVerMedia Technologies go up and down completely randomly.
Pair Corralation between Great Wall and AVerMedia Technologies
Assuming the 90 days trading horizon Great Wall is expected to generate 1.16 times less return on investment than AVerMedia Technologies. But when comparing it to its historical volatility, Great Wall Enterprise is 4.4 times less risky than AVerMedia Technologies. It trades about 0.51 of its potential returns per unit of risk. AVerMedia Technologies is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4,855 in AVerMedia Technologies on November 28, 2024 and sell it today you would earn a total of 325.00 from holding AVerMedia Technologies or generate 6.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Wall Enterprise vs. AVerMedia Technologies
Performance |
| Timeline |
| Great Wall Enterprise |
| AVerMedia Technologies |
Great Wall and AVerMedia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Wall and AVerMedia Technologies
The main advantage of trading using opposite Great Wall and AVerMedia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Wall position performs unexpectedly, AVerMedia Technologies 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 AVerMedia Technologies will offset losses from the drop in AVerMedia Technologies' long position.| Great Wall vs. Charoen Pokphand Enterprise | Great Wall vs. Uni President Enterprises Corp | Great Wall vs. Lien Hwa Industrial | Great Wall vs. Standard Foods Corp |
| AVerMedia Technologies vs. Clevo Co | AVerMedia Technologies vs. Zinwell | AVerMedia Technologies vs. Gigastorage Corp | AVerMedia Technologies vs. Shuttle |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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