Correlation Between AVerMedia Technologies and Clevo
Can any of the company-specific risk be diversified away by investing in both AVerMedia Technologies and Clevo 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 Clevo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVerMedia Technologies and Clevo Co, you can compare the effects of market volatilities on AVerMedia Technologies and Clevo 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 Clevo. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVerMedia Technologies and Clevo.
Diversification Opportunities for AVerMedia Technologies and Clevo
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AVerMedia and Clevo is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding AVerMedia Technologies and Clevo Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clevo 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 Clevo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clevo has no effect on the direction of AVerMedia Technologies i.e., AVerMedia Technologies and Clevo go up and down completely randomly.
Pair Corralation between AVerMedia Technologies and Clevo
Assuming the 90 days trading horizon AVerMedia Technologies is expected to under-perform the Clevo. In addition to that, AVerMedia Technologies is 1.99 times more volatile than Clevo Co. It trades about -0.03 of its total potential returns per unit of risk. Clevo Co is currently generating about 0.02 per unit of volatility. If you would invest 5,150 in Clevo Co on November 3, 2024 and sell it today you would earn a total of 20.00 from holding Clevo Co or generate 0.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AVerMedia Technologies vs. Clevo Co
Performance |
| Timeline |
| AVerMedia Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Clevo |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
AVerMedia Technologies and Clevo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVerMedia Technologies and Clevo
The main advantage of trading using opposite AVerMedia Technologies and Clevo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVerMedia Technologies position performs unexpectedly, Clevo 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 Clevo will offset losses from the drop in Clevo's long position.The idea behind AVerMedia Technologies and Clevo Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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