Correlation Between AVerMedia Technologies and Evergreen International
Can any of the company-specific risk be diversified away by investing in both AVerMedia Technologies and Evergreen International 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 Evergreen International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVerMedia Technologies and Evergreen International Storage, you can compare the effects of market volatilities on AVerMedia Technologies and Evergreen International 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 Evergreen International. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVerMedia Technologies and Evergreen International.
Diversification Opportunities for AVerMedia Technologies and Evergreen International
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between AVerMedia and Evergreen is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding AVerMedia Technologies and Evergreen International Storag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evergreen International 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 Evergreen International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evergreen International has no effect on the direction of AVerMedia Technologies i.e., AVerMedia Technologies and Evergreen International go up and down completely randomly.
Pair Corralation between AVerMedia Technologies and Evergreen International
Assuming the 90 days trading horizon AVerMedia Technologies is expected to generate 1.57 times more return on investment than Evergreen International. However, AVerMedia Technologies is 1.57 times more volatile than Evergreen International Storage. It trades about 0.05 of its potential returns per unit of risk. Evergreen International Storage is currently generating about -0.09 per unit of risk. If you would invest 3,990 in AVerMedia Technologies on September 4, 2024 and sell it today you would earn a total of 70.00 from holding AVerMedia Technologies or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
AVerMedia Technologies vs. Evergreen International Storag
Performance |
| Timeline |
| AVerMedia Technologies |
| Evergreen International |
AVerMedia Technologies and Evergreen International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVerMedia Technologies and Evergreen International
The main advantage of trading using opposite AVerMedia Technologies and Evergreen International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVerMedia Technologies position performs unexpectedly, Evergreen International 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 Evergreen International will offset losses from the drop in Evergreen International'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 |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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