Correlation Between AVerMedia Technologies and Taiwan Sanyo
Can any of the company-specific risk be diversified away by investing in both AVerMedia Technologies and Taiwan Sanyo 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 Taiwan Sanyo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVerMedia Technologies and Taiwan Sanyo Electric, you can compare the effects of market volatilities on AVerMedia Technologies and Taiwan Sanyo 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 Taiwan Sanyo. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVerMedia Technologies and Taiwan Sanyo.
Diversification Opportunities for AVerMedia Technologies and Taiwan Sanyo
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AVerMedia and Taiwan is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding AVerMedia Technologies and Taiwan Sanyo Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Sanyo Electric 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 Taiwan Sanyo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Sanyo Electric has no effect on the direction of AVerMedia Technologies i.e., AVerMedia Technologies and Taiwan Sanyo go up and down completely randomly.
Pair Corralation between AVerMedia Technologies and Taiwan Sanyo
Assuming the 90 days trading horizon AVerMedia Technologies is expected to generate 4.91 times more return on investment than Taiwan Sanyo. However, AVerMedia Technologies is 4.91 times more volatile than Taiwan Sanyo Electric. It trades about 0.07 of its potential returns per unit of risk. Taiwan Sanyo Electric is currently generating about -0.18 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 Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
AVerMedia Technologies vs. Taiwan Sanyo Electric
Performance |
| Timeline |
| AVerMedia Technologies |
| Taiwan Sanyo Electric |
AVerMedia Technologies and Taiwan Sanyo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVerMedia Technologies and Taiwan Sanyo
The main advantage of trading using opposite AVerMedia Technologies and Taiwan Sanyo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVerMedia Technologies position performs unexpectedly, Taiwan Sanyo 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 Taiwan Sanyo will offset losses from the drop in Taiwan Sanyo's long position.| AVerMedia Technologies vs. Clevo Co | AVerMedia Technologies vs. Zinwell | AVerMedia Technologies vs. Gigastorage Corp | AVerMedia Technologies vs. Shuttle |
| Taiwan Sanyo vs. Chaintech Technology Corp | Taiwan Sanyo vs. AVerMedia Technologies | Taiwan Sanyo vs. Avision | Taiwan Sanyo 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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