Correlation Between Avision and Nien Made
Can any of the company-specific risk be diversified away by investing in both Avision and Nien Made 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 Avision and Nien Made into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avision and Nien Made Enterprise, you can compare the effects of market volatilities on Avision and Nien Made 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 Avision with a short position of Nien Made. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avision and Nien Made.
Diversification Opportunities for Avision and Nien Made
Poor diversification
The 3 months correlation between Avision and Nien is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Avision and Nien Made Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nien Made Enterprise and Avision 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 Avision are associated (or correlated) with Nien Made. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nien Made Enterprise has no effect on the direction of Avision i.e., Avision and Nien Made go up and down completely randomly.
Pair Corralation between Avision and Nien Made
Assuming the 90 days trading horizon Avision is expected to under-perform the Nien Made. In addition to that, Avision is 1.57 times more volatile than Nien Made Enterprise. It trades about -0.25 of its total potential returns per unit of risk. Nien Made Enterprise is currently generating about -0.34 per unit of volatility. If you would invest 49,200 in Nien Made Enterprise on September 3, 2024 and sell it today you would lose (8,700) from holding Nien Made Enterprise or give up 17.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avision vs. Nien Made Enterprise
Performance |
| Timeline |
| Avision |
| Nien Made Enterprise |
Avision and Nien Made Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avision and Nien Made
The main advantage of trading using opposite Avision and Nien Made positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avision position performs unexpectedly, Nien Made 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 Nien Made will offset losses from the drop in Nien Made's long position.| Avision vs. KYE Systems Corp | Avision vs. Clevo Co | Avision vs. Silicon Integrated Systems | Avision vs. Ability Enterprise Co |
| Nien Made vs. Feng Tay Enterprises | Nien Made vs. Chailease Holding Co | Nien Made vs. Eclat Textile Co | Nien Made vs. Giant Manufacturing Co |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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