Correlation Between Basso Industry and AVerMedia Technologies
Can any of the company-specific risk be diversified away by investing in both Basso Industry 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 Basso Industry and AVerMedia Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Basso Industry Corp and AVerMedia Technologies, you can compare the effects of market volatilities on Basso Industry 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 Basso Industry with a short position of AVerMedia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basso Industry and AVerMedia Technologies.
Diversification Opportunities for Basso Industry and AVerMedia Technologies
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Basso and AVerMedia is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Basso Industry Corp and AVerMedia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVerMedia Technologies and Basso Industry 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 Basso Industry Corp 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 Basso Industry i.e., Basso Industry and AVerMedia Technologies go up and down completely randomly.
Pair Corralation between Basso Industry and AVerMedia Technologies
Assuming the 90 days trading horizon Basso Industry Corp is expected to generate 0.33 times more return on investment than AVerMedia Technologies. However, Basso Industry Corp is 3.06 times less risky than AVerMedia Technologies. It trades about -0.02 of its potential returns per unit of risk. AVerMedia Technologies is currently generating about -0.04 per unit of risk. If you would invest 4,215 in Basso Industry Corp on October 31, 2024 and sell it today you would lose (20.00) from holding Basso Industry Corp or give up 0.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Basso Industry Corp vs. AVerMedia Technologies
Performance |
| Timeline |
| Basso Industry Corp |
| AVerMedia Technologies |
Basso Industry and AVerMedia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Basso Industry and AVerMedia Technologies
The main advantage of trading using opposite Basso Industry and AVerMedia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basso Industry 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.| Basso Industry vs. Cheng Shin Rubber | Basso Industry vs. Kung Long Batteries | Basso Industry vs. Pou Chen Corp | Basso Industry vs. China Steel Chemical |
| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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