Correlation Between AVerMedia Technologies and Chenming Mold
Can any of the company-specific risk be diversified away by investing in both AVerMedia Technologies and Chenming Mold 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 Chenming Mold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVerMedia Technologies and Chenming Mold Industrial, you can compare the effects of market volatilities on AVerMedia Technologies and Chenming Mold 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 Chenming Mold. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVerMedia Technologies and Chenming Mold.
Diversification Opportunities for AVerMedia Technologies and Chenming Mold
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AVerMedia and Chenming is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding AVerMedia Technologies and Chenming Mold Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chenming Mold Industrial 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 Chenming Mold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chenming Mold Industrial has no effect on the direction of AVerMedia Technologies i.e., AVerMedia Technologies and Chenming Mold go up and down completely randomly.
Pair Corralation between AVerMedia Technologies and Chenming Mold
Assuming the 90 days trading horizon AVerMedia Technologies is expected to generate 0.47 times more return on investment than Chenming Mold. However, AVerMedia Technologies is 2.14 times less risky than Chenming Mold. It trades about 0.09 of its potential returns per unit of risk. Chenming Mold Industrial is currently generating about -0.08 per unit of risk. If you would invest 4,030 in AVerMedia Technologies on August 30, 2024 and sell it today you would earn a total of 135.00 from holding AVerMedia Technologies or generate 3.35% 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. Chenming Mold Industrial
Performance |
| Timeline |
| AVerMedia Technologies |
| Chenming Mold Industrial |
AVerMedia Technologies and Chenming Mold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVerMedia Technologies and Chenming Mold
The main advantage of trading using opposite AVerMedia Technologies and Chenming Mold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVerMedia Technologies position performs unexpectedly, Chenming Mold 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 Chenming Mold will offset losses from the drop in Chenming Mold's long position.| AVerMedia Technologies vs. Yulon Finance Corp | AVerMedia Technologies vs. Taiwan Secom Co | AVerMedia Technologies vs. Great Wall Enterprise |
| Chenming Mold vs. Clevo Co | Chenming Mold vs. Zinwell | Chenming Mold vs. Min Aik Technology | Chenming Mold vs. Promise Technology |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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