Correlation Between AVerMedia Technologies and Roo Hsing
Can any of the company-specific risk be diversified away by investing in both AVerMedia Technologies and Roo Hsing 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 Roo Hsing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVerMedia Technologies and Roo Hsing Co, you can compare the effects of market volatilities on AVerMedia Technologies and Roo Hsing 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 Roo Hsing. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVerMedia Technologies and Roo Hsing.
Diversification Opportunities for AVerMedia Technologies and Roo Hsing
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AVerMedia and Roo is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding AVerMedia Technologies and Roo Hsing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roo Hsing 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 Roo Hsing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roo Hsing has no effect on the direction of AVerMedia Technologies i.e., AVerMedia Technologies and Roo Hsing go up and down completely randomly.
Pair Corralation between AVerMedia Technologies and Roo Hsing
Assuming the 90 days trading horizon AVerMedia Technologies is expected to under-perform the Roo Hsing. In addition to that, AVerMedia Technologies is 1.37 times more volatile than Roo Hsing Co. It trades about -0.05 of its total potential returns per unit of risk. Roo Hsing Co is currently generating about 0.02 per unit of volatility. If you would invest 309.00 in Roo Hsing Co on September 2, 2024 and sell it today you would earn a total of 7.00 from holding Roo Hsing Co or generate 2.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AVerMedia Technologies vs. Roo Hsing Co
Performance |
| Timeline |
| AVerMedia Technologies |
| Roo Hsing |
AVerMedia Technologies and Roo Hsing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVerMedia Technologies and Roo Hsing
The main advantage of trading using opposite AVerMedia Technologies and Roo Hsing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVerMedia Technologies position performs unexpectedly, Roo Hsing 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 Roo Hsing will offset losses from the drop in Roo Hsing's long position.| AVerMedia Technologies vs. Chaintech Technology Corp | AVerMedia Technologies vs. Avision | AVerMedia Technologies vs. Clevo Co | AVerMedia Technologies vs. Elitegroup Computer Systems |
| Roo Hsing vs. Chaintech Technology Corp | Roo Hsing vs. Avision | Roo Hsing vs. Clevo Co | Roo Hsing 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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