Correlation Between AVerMedia Technologies and Yulon Nissan
Can any of the company-specific risk be diversified away by investing in both AVerMedia Technologies and Yulon Nissan 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 Yulon Nissan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVerMedia Technologies and Yulon Nissan Motor, you can compare the effects of market volatilities on AVerMedia Technologies and Yulon Nissan 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 Yulon Nissan. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVerMedia Technologies and Yulon Nissan.
Diversification Opportunities for AVerMedia Technologies and Yulon Nissan
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AVerMedia and Yulon is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding AVerMedia Technologies and Yulon Nissan Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yulon Nissan Motor 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 Yulon Nissan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yulon Nissan Motor has no effect on the direction of AVerMedia Technologies i.e., AVerMedia Technologies and Yulon Nissan go up and down completely randomly.
Pair Corralation between AVerMedia Technologies and Yulon Nissan
Assuming the 90 days trading horizon AVerMedia Technologies is expected to generate 1.79 times more return on investment than Yulon Nissan. However, AVerMedia Technologies is 1.79 times more volatile than Yulon Nissan Motor. It trades about 0.0 of its potential returns per unit of risk. Yulon Nissan Motor is currently generating about -0.1 per unit of risk. If you would invest 4,430 in AVerMedia Technologies on September 3, 2024 and sell it today you would lose (320.00) from holding AVerMedia Technologies or give up 7.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AVerMedia Technologies vs. Yulon Nissan Motor
Performance |
| Timeline |
| AVerMedia Technologies |
| Yulon Nissan Motor |
AVerMedia Technologies and Yulon Nissan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVerMedia Technologies and Yulon Nissan
The main advantage of trading using opposite AVerMedia Technologies and Yulon Nissan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVerMedia Technologies position performs unexpectedly, Yulon Nissan 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 Yulon Nissan will offset losses from the drop in Yulon Nissan's long position.| AVerMedia Technologies vs. Clevo Co | AVerMedia Technologies vs. Zinwell | AVerMedia Technologies vs. Gigastorage Corp | AVerMedia Technologies vs. Shuttle |
| Yulon Nissan vs. Tainan Spinning Co | Yulon Nissan vs. Chia Her Industrial | Yulon Nissan vs. WiseChip Semiconductor | Yulon Nissan vs. Novatek Microelectronics Corp |
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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