Correlation Between AVerMedia Technologies and Federal Corp
Can any of the company-specific risk be diversified away by investing in both AVerMedia Technologies and Federal Corp 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 Federal Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVerMedia Technologies and Federal Corp, you can compare the effects of market volatilities on AVerMedia Technologies and Federal Corp 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 Federal Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVerMedia Technologies and Federal Corp.
Diversification Opportunities for AVerMedia Technologies and Federal Corp
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AVerMedia and Federal is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding AVerMedia Technologies and Federal Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Corp 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 Federal Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Corp has no effect on the direction of AVerMedia Technologies i.e., AVerMedia Technologies and Federal Corp go up and down completely randomly.
Pair Corralation between AVerMedia Technologies and Federal Corp
Assuming the 90 days trading horizon AVerMedia Technologies is expected to generate 2.21 times more return on investment than Federal Corp. However, AVerMedia Technologies is 2.21 times more volatile than Federal Corp. It trades about 0.07 of its potential returns per unit of risk. Federal Corp is currently generating about -0.01 per unit of risk. If you would invest 2,335 in AVerMedia Technologies on December 1, 2024 and sell it today you would earn a total of 2,765 from holding AVerMedia Technologies or generate 118.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AVerMedia Technologies vs. Federal Corp
Performance |
| Timeline |
| AVerMedia Technologies |
| Federal Corp |
AVerMedia Technologies and Federal Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVerMedia Technologies and Federal Corp
The main advantage of trading using opposite AVerMedia Technologies and Federal Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVerMedia Technologies position performs unexpectedly, Federal Corp 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 Federal Corp will offset losses from the drop in Federal Corp's long position.| AVerMedia Technologies vs. Clevo Co | AVerMedia Technologies vs. Zinwell | AVerMedia Technologies vs. Gigastorage Corp | AVerMedia Technologies vs. Shuttle |
| Federal Corp vs. Nankang Rubber Tire | Federal Corp vs. Kenda Rubber Industrial | Federal Corp vs. Formosan Rubber Group | Federal Corp vs. Yulon Motor 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 Stocks Directory module to find actively traded stocks across global markets.
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