Correlation Between AVerMedia Technologies and Makalot Industrial
Can any of the company-specific risk be diversified away by investing in both AVerMedia Technologies and Makalot Industrial 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 Makalot Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVerMedia Technologies and Makalot Industrial Co, you can compare the effects of market volatilities on AVerMedia Technologies and Makalot Industrial 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 Makalot Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVerMedia Technologies and Makalot Industrial.
Diversification Opportunities for AVerMedia Technologies and Makalot Industrial
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AVerMedia and Makalot is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding AVerMedia Technologies and Makalot Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Makalot Industrial 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 Makalot Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Makalot Industrial has no effect on the direction of AVerMedia Technologies i.e., AVerMedia Technologies and Makalot Industrial go up and down completely randomly.
Pair Corralation between AVerMedia Technologies and Makalot Industrial
Assuming the 90 days trading horizon AVerMedia Technologies is expected to generate 2.51 times less return on investment than Makalot Industrial. But when comparing it to its historical volatility, AVerMedia Technologies is 1.37 times less risky than Makalot Industrial. It trades about 0.03 of its potential returns per unit of risk. Makalot Industrial Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 31,400 in Makalot Industrial Co on September 2, 2024 and sell it today you would earn a total of 650.00 from holding Makalot Industrial Co or generate 2.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AVerMedia Technologies vs. Makalot Industrial Co
Performance |
| Timeline |
| AVerMedia Technologies |
| Makalot Industrial |
AVerMedia Technologies and Makalot Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVerMedia Technologies and Makalot Industrial
The main advantage of trading using opposite AVerMedia Technologies and Makalot Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVerMedia Technologies position performs unexpectedly, Makalot Industrial 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 Makalot Industrial will offset losses from the drop in Makalot Industrial's long position.| AVerMedia Technologies vs. Chaintech Technology Corp | AVerMedia Technologies vs. Avision | AVerMedia Technologies vs. Clevo Co | AVerMedia Technologies vs. Elitegroup Computer Systems |
| Makalot Industrial vs. Chaintech Technology Corp | Makalot Industrial vs. Avision | Makalot Industrial vs. Clevo Co | Makalot Industrial vs. Elitegroup Computer Systems |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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