Correlation Between AVerMedia Technologies and Space Shuttle
Can any of the company-specific risk be diversified away by investing in both AVerMedia Technologies and Space Shuttle 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 Space Shuttle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVerMedia Technologies and Space Shuttle Hi Tech, you can compare the effects of market volatilities on AVerMedia Technologies and Space Shuttle 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 Space Shuttle. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVerMedia Technologies and Space Shuttle.
Diversification Opportunities for AVerMedia Technologies and Space Shuttle
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AVerMedia and Space is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding AVerMedia Technologies and Space Shuttle Hi Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Space Shuttle Hi 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 Space Shuttle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Space Shuttle Hi has no effect on the direction of AVerMedia Technologies i.e., AVerMedia Technologies and Space Shuttle go up and down completely randomly.
Pair Corralation between AVerMedia Technologies and Space Shuttle
Assuming the 90 days trading horizon AVerMedia Technologies is expected to generate 1.26 times more return on investment than Space Shuttle. However, AVerMedia Technologies is 1.26 times more volatile than Space Shuttle Hi Tech. It trades about 0.02 of its potential returns per unit of risk. Space Shuttle Hi Tech is currently generating about 0.0 per unit of risk. If you would invest 3,870 in AVerMedia Technologies on September 4, 2024 and sell it today you would earn a total of 190.00 from holding AVerMedia Technologies or generate 4.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.59% |
| Values | Daily Returns |
AVerMedia Technologies vs. Space Shuttle Hi Tech
Performance |
| Timeline |
| AVerMedia Technologies |
| Space Shuttle Hi |
AVerMedia Technologies and Space Shuttle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVerMedia Technologies and Space Shuttle
The main advantage of trading using opposite AVerMedia Technologies and Space Shuttle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVerMedia Technologies position performs unexpectedly, Space Shuttle 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 Space Shuttle will offset losses from the drop in Space Shuttle's long position.| AVerMedia Technologies vs. Tainan Spinning Co | AVerMedia Technologies vs. Chia Her Industrial | AVerMedia Technologies vs. WiseChip Semiconductor | AVerMedia Technologies vs. Novatek Microelectronics Corp |
| Space Shuttle vs. Universal Microelectronics Co | Space Shuttle vs. AVerMedia Technologies | Space Shuttle vs. Symtek Automation Asia | Space Shuttle 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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