Correlation Between AVerMedia Technologies and Altek Corp
Can any of the company-specific risk be diversified away by investing in both AVerMedia Technologies and Altek Corp 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 Altek Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVerMedia Technologies and Altek Corp, you can compare the effects of market volatilities on AVerMedia Technologies and Altek Corp 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 Altek Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVerMedia Technologies and Altek Corp.
Diversification Opportunities for AVerMedia Technologies and Altek Corp
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AVerMedia and Altek is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding AVerMedia Technologies and Altek Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altek Corp 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 Altek Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altek Corp has no effect on the direction of AVerMedia Technologies i.e., AVerMedia Technologies and Altek Corp go up and down completely randomly.
Pair Corralation between AVerMedia Technologies and Altek Corp
Assuming the 90 days trading horizon AVerMedia Technologies is expected to generate 1.28 times more return on investment than Altek Corp. However, AVerMedia Technologies is 1.28 times more volatile than Altek Corp. It trades about 0.03 of its potential returns per unit of risk. Altek Corp is currently generating about -0.18 per unit of risk. If you would invest 4,080 in AVerMedia Technologies on September 2, 2024 and sell it today you would earn a total of 30.00 from holding AVerMedia Technologies or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AVerMedia Technologies vs. Altek Corp
Performance |
| Timeline |
| AVerMedia Technologies |
| Altek Corp |
AVerMedia Technologies and Altek Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVerMedia Technologies and Altek Corp
The main advantage of trading using opposite AVerMedia Technologies and Altek Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVerMedia Technologies position performs unexpectedly, Altek Corp 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 Altek Corp will offset losses from the drop in Altek Corp's long position.| AVerMedia Technologies vs. Chaintech Technology Corp | AVerMedia Technologies vs. Avision | AVerMedia Technologies vs. Clevo Co | AVerMedia Technologies vs. Elitegroup Computer Systems |
| Altek Corp vs. Chaintech Technology Corp | Altek Corp vs. Avision | Altek Corp vs. Clevo Co | Altek Corp 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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