Correlation Between Tong Yang and AVerMedia Technologies
Can any of the company-specific risk be diversified away by investing in both Tong Yang 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 Tong Yang and AVerMedia Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tong Yang Industry and AVerMedia Technologies, you can compare the effects of market volatilities on Tong Yang 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 Tong Yang with a short position of AVerMedia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tong Yang and AVerMedia Technologies.
Diversification Opportunities for Tong Yang and AVerMedia Technologies
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tong and AVerMedia is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Tong Yang Industry and AVerMedia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVerMedia Technologies and Tong Yang 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 Tong Yang Industry 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 Tong Yang i.e., Tong Yang and AVerMedia Technologies go up and down completely randomly.
Pair Corralation between Tong Yang and AVerMedia Technologies
Assuming the 90 days trading horizon Tong Yang Industry is expected to under-perform the AVerMedia Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Tong Yang Industry is 1.83 times less risky than AVerMedia Technologies. The stock trades about -0.13 of its potential returns per unit of risk. The AVerMedia Technologies is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 4,980 in AVerMedia Technologies on October 31, 2024 and sell it today you would lose (170.00) from holding AVerMedia Technologies or give up 3.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tong Yang Industry vs. AVerMedia Technologies
Performance |
| Timeline |
| Tong Yang Industry |
| AVerMedia Technologies |
Tong Yang and AVerMedia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tong Yang and AVerMedia Technologies
The main advantage of trading using opposite Tong Yang and AVerMedia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tong Yang 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.| Tong Yang vs. TYC Brother Industrial | Tong Yang vs. Hota Industrial Mfg | Tong Yang vs. Yulon Motor Co | Tong Yang vs. Far Eastern New |
| AVerMedia Technologies vs. Tong Yang Industry | AVerMedia Technologies vs. Ta Yih Industrial | AVerMedia Technologies vs. Basso Industry Corp | AVerMedia Technologies vs. China Motor Corp |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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