Correlation Between AVerMedia Technologies and Powertech Industrial
Can any of the company-specific risk be diversified away by investing in both AVerMedia Technologies and Powertech Industrial 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 Powertech Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVerMedia Technologies and Powertech Industrial Co, you can compare the effects of market volatilities on AVerMedia Technologies and Powertech Industrial 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 Powertech Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVerMedia Technologies and Powertech Industrial.
Diversification Opportunities for AVerMedia Technologies and Powertech Industrial
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AVerMedia and Powertech is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding AVerMedia Technologies and Powertech Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powertech 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 Powertech Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powertech Industrial has no effect on the direction of AVerMedia Technologies i.e., AVerMedia Technologies and Powertech Industrial go up and down completely randomly.
Pair Corralation between AVerMedia Technologies and Powertech Industrial
Assuming the 90 days trading horizon AVerMedia Technologies is expected to generate 1.06 times less return on investment than Powertech Industrial. In addition to that, AVerMedia Technologies is 1.2 times more volatile than Powertech Industrial Co. It trades about 0.05 of its total potential returns per unit of risk. Powertech Industrial Co is currently generating about 0.07 per unit of volatility. If you would invest 1,620 in Powertech Industrial Co on September 4, 2024 and sell it today you would earn a total of 1,485 from holding Powertech Industrial Co or generate 91.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AVerMedia Technologies vs. Powertech Industrial Co
Performance |
| Timeline |
| AVerMedia Technologies |
| Powertech Industrial |
AVerMedia Technologies and Powertech Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVerMedia Technologies and Powertech Industrial
The main advantage of trading using opposite AVerMedia Technologies and Powertech Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVerMedia Technologies position performs unexpectedly, Powertech Industrial 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 Powertech Industrial will offset losses from the drop in Powertech Industrial'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 |
| Powertech Industrial vs. Universal Microelectronics Co | Powertech Industrial vs. AVerMedia Technologies | Powertech Industrial vs. Symtek Automation Asia | Powertech Industrial vs. WiseChip Semiconductor |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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