Correlation Between AVerMedia Technologies and Ruentex Industries
Can any of the company-specific risk be diversified away by investing in both AVerMedia Technologies and Ruentex Industries 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 Ruentex Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVerMedia Technologies and Ruentex Industries, you can compare the effects of market volatilities on AVerMedia Technologies and Ruentex Industries 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 Ruentex Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVerMedia Technologies and Ruentex Industries.
Diversification Opportunities for AVerMedia Technologies and Ruentex Industries
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AVerMedia and Ruentex is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding AVerMedia Technologies and Ruentex Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ruentex Industries 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 Ruentex Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ruentex Industries has no effect on the direction of AVerMedia Technologies i.e., AVerMedia Technologies and Ruentex Industries go up and down completely randomly.
Pair Corralation between AVerMedia Technologies and Ruentex Industries
Assuming the 90 days trading horizon AVerMedia Technologies is expected to generate 1.15 times less return on investment than Ruentex Industries. In addition to that, AVerMedia Technologies is 1.92 times more volatile than Ruentex Industries. It trades about 0.02 of its total potential returns per unit of risk. Ruentex Industries is currently generating about 0.05 per unit of volatility. If you would invest 6,370 in Ruentex Industries on September 2, 2024 and sell it today you would earn a total of 1,370 from holding Ruentex Industries or generate 21.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AVerMedia Technologies vs. Ruentex Industries
Performance |
| Timeline |
| AVerMedia Technologies |
| Ruentex Industries |
AVerMedia Technologies and Ruentex Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVerMedia Technologies and Ruentex Industries
The main advantage of trading using opposite AVerMedia Technologies and Ruentex Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVerMedia Technologies position performs unexpectedly, Ruentex Industries 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 Ruentex Industries will offset losses from the drop in Ruentex Industries' long position.| AVerMedia Technologies vs. Chaintech Technology Corp | AVerMedia Technologies vs. Avision | AVerMedia Technologies vs. Clevo Co | AVerMedia Technologies vs. Elitegroup Computer Systems |
| Ruentex Industries vs. Chaintech Technology Corp | Ruentex Industries vs. Avision | Ruentex Industries vs. Clevo Co | Ruentex Industries vs. Elitegroup Computer Systems |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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