Correlation Between AVerMedia Technologies and Lily Textile
Can any of the company-specific risk be diversified away by investing in both AVerMedia Technologies and Lily Textile 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 AVerMedia Technologies and Lily Textile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVerMedia Technologies and Lily Textile Co, you can compare the effects of market volatilities on AVerMedia Technologies and Lily Textile 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 AVerMedia Technologies with a short position of Lily Textile. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVerMedia Technologies and Lily Textile.
Diversification Opportunities for AVerMedia Technologies and Lily Textile
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AVerMedia and Lily is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding AVerMedia Technologies and Lily Textile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lily Textile and AVerMedia 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 AVerMedia Technologies are associated (or correlated) with Lily Textile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lily Textile has no effect on the direction of AVerMedia Technologies i.e., AVerMedia Technologies and Lily Textile go up and down completely randomly.
Pair Corralation between AVerMedia Technologies and Lily Textile
Assuming the 90 days trading horizon AVerMedia Technologies is expected to generate 1.34 times more return on investment than Lily Textile. However, AVerMedia Technologies is 1.34 times more volatile than Lily Textile Co. It trades about 0.07 of its potential returns per unit of risk. Lily Textile Co is currently generating about -0.1 per unit of risk. If you would invest 4,005 in AVerMedia Technologies on September 1, 2024 and sell it today you would earn a total of 105.00 from holding AVerMedia Technologies or generate 2.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
AVerMedia Technologies vs. Lily Textile Co
Performance |
| Timeline |
| AVerMedia Technologies |
| Lily Textile |
AVerMedia Technologies and Lily Textile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVerMedia Technologies and Lily Textile
The main advantage of trading using opposite AVerMedia Technologies and Lily Textile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVerMedia Technologies position performs unexpectedly, Lily Textile 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 Lily Textile will offset losses from the drop in Lily Textile's long position.| AVerMedia Technologies vs. Clevo Co | AVerMedia Technologies vs. Zinwell | AVerMedia Technologies vs. Gigastorage Corp | AVerMedia Technologies vs. Shuttle |
| Lily Textile vs. Chaintech Technology Corp | Lily Textile vs. AVerMedia Technologies | Lily Textile vs. Avision | Lily Textile vs. Clevo 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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