Correlation Between AVerMedia Technologies and Far Eastern
Can any of the company-specific risk be diversified away by investing in both AVerMedia Technologies and Far Eastern 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 Far Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVerMedia Technologies and Far Eastern Department, you can compare the effects of market volatilities on AVerMedia Technologies and Far Eastern 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 Far Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVerMedia Technologies and Far Eastern.
Diversification Opportunities for AVerMedia Technologies and Far Eastern
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between AVerMedia and Far is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding AVerMedia Technologies and Far Eastern Department in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Far Eastern Department 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 Far Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Far Eastern Department has no effect on the direction of AVerMedia Technologies i.e., AVerMedia Technologies and Far Eastern go up and down completely randomly.
Pair Corralation between AVerMedia Technologies and Far Eastern
Assuming the 90 days trading horizon AVerMedia Technologies is expected to generate 2.23 times more return on investment than Far Eastern. However, AVerMedia Technologies is 2.23 times more volatile than Far Eastern Department. It trades about 0.05 of its potential returns per unit of risk. Far Eastern Department is currently generating about 0.01 per unit of risk. If you would invest 2,315 in AVerMedia Technologies on January 17, 2025 and sell it today you would earn a total of 1,370 from holding AVerMedia Technologies or generate 59.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AVerMedia Technologies vs. Far Eastern Department
Performance |
| Timeline |
| AVerMedia Technologies |
| Far Eastern Department |
AVerMedia Technologies and Far Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVerMedia Technologies and Far Eastern
The main advantage of trading using opposite AVerMedia Technologies and Far Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVerMedia Technologies position performs unexpectedly, Far Eastern 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 Far Eastern will offset losses from the drop in Far Eastern's long position.| AVerMedia Technologies vs. Clevo Co | AVerMedia Technologies vs. Zinwell | AVerMedia Technologies vs. Gigastorage Corp | AVerMedia Technologies vs. Shuttle |
| Far Eastern vs. Yulon Motor Co | Far Eastern vs. Chang Hwa Commercial | Far Eastern vs. Sinopac Financial Holdings | Far Eastern vs. Taiwan Glass Ind |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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