Correlation Between AVerMedia Technologies and TECO Electric
Can any of the company-specific risk be diversified away by investing in both AVerMedia Technologies and TECO Electric 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 TECO Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVerMedia Technologies and TECO Electric Machinery, you can compare the effects of market volatilities on AVerMedia Technologies and TECO Electric 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 TECO Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVerMedia Technologies and TECO Electric.
Diversification Opportunities for AVerMedia Technologies and TECO Electric
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AVerMedia and TECO is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding AVerMedia Technologies and TECO Electric Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TECO Electric Machinery 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 TECO Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TECO Electric Machinery has no effect on the direction of AVerMedia Technologies i.e., AVerMedia Technologies and TECO Electric go up and down completely randomly.
Pair Corralation between AVerMedia Technologies and TECO Electric
Assuming the 90 days trading horizon AVerMedia Technologies is expected to generate 2.02 times less return on investment than TECO Electric. But when comparing it to its historical volatility, AVerMedia Technologies is 1.09 times less risky than TECO Electric. It trades about 0.09 of its potential returns per unit of risk. TECO Electric Machinery is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 4,990 in TECO Electric Machinery on September 3, 2024 and sell it today you would earn a total of 320.00 from holding TECO Electric Machinery or generate 6.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AVerMedia Technologies vs. TECO Electric Machinery
Performance |
| Timeline |
| AVerMedia Technologies |
| TECO Electric Machinery |
AVerMedia Technologies and TECO Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVerMedia Technologies and TECO Electric
The main advantage of trading using opposite AVerMedia Technologies and TECO Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVerMedia Technologies position performs unexpectedly, TECO Electric 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 TECO Electric will offset losses from the drop in TECO Electric's long position.| AVerMedia Technologies vs. Clevo Co | AVerMedia Technologies vs. Zinwell | AVerMedia Technologies vs. Gigastorage Corp | AVerMedia Technologies vs. Shuttle |
| TECO Electric vs. Universal Microelectronics Co | TECO Electric vs. AVerMedia Technologies | TECO Electric vs. Symtek Automation Asia | TECO Electric vs. WiseChip Semiconductor |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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