Correlation Between Ichia Technologies and Avision
Can any of the company-specific risk be diversified away by investing in both Ichia Technologies and Avision 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 Ichia Technologies and Avision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ichia Technologies and Avision, you can compare the effects of market volatilities on Ichia Technologies and Avision 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 Ichia Technologies with a short position of Avision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ichia Technologies and Avision.
Diversification Opportunities for Ichia Technologies and Avision
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ichia and Avision is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Ichia Technologies and Avision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avision and Ichia Technologies 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 Ichia Technologies are associated (or correlated) with Avision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avision has no effect on the direction of Ichia Technologies i.e., Ichia Technologies and Avision go up and down completely randomly.
Pair Corralation between Ichia Technologies and Avision
Assuming the 90 days trading horizon Ichia Technologies is expected to generate 1.33 times less return on investment than Avision. But when comparing it to its historical volatility, Ichia Technologies is 1.72 times less risky than Avision. It trades about 0.39 of its potential returns per unit of risk. Avision is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 420.00 in Avision on November 29, 2024 and sell it today you would earn a total of 65.00 from holding Avision or generate 15.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ichia Technologies vs. Avision
Performance |
| Timeline |
| Ichia Technologies |
| Avision |
Ichia Technologies and Avision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ichia Technologies and Avision
The main advantage of trading using opposite Ichia Technologies and Avision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ichia Technologies position performs unexpectedly, Avision 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 Avision will offset losses from the drop in Avision's long position.| Ichia Technologies vs. Cheng Uei Precision | Ichia Technologies vs. Sunplus Technology Co | Ichia Technologies vs. Merry Electronics Co | Ichia Technologies vs. D Link Corp |
| Avision vs. KYE Systems Corp | Avision vs. Clevo Co | Avision vs. Silicon Integrated Systems | Avision vs. Ability Enterprise 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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