Correlation Between AVerMedia Technologies and Gold Rain
Can any of the company-specific risk be diversified away by investing in both AVerMedia Technologies and Gold Rain 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 Gold Rain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVerMedia Technologies and Gold Rain Enterprises, you can compare the effects of market volatilities on AVerMedia Technologies and Gold Rain 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 Gold Rain. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVerMedia Technologies and Gold Rain.
Diversification Opportunities for AVerMedia Technologies and Gold Rain
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AVerMedia and Gold is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding AVerMedia Technologies and Gold Rain Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Rain Enterprises 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 Gold Rain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Rain Enterprises has no effect on the direction of AVerMedia Technologies i.e., AVerMedia Technologies and Gold Rain go up and down completely randomly.
Pair Corralation between AVerMedia Technologies and Gold Rain
Assuming the 90 days trading horizon AVerMedia Technologies is expected to generate 1.06 times more return on investment than Gold Rain. However, AVerMedia Technologies is 1.06 times more volatile than Gold Rain Enterprises. It trades about 0.06 of its potential returns per unit of risk. Gold Rain Enterprises is currently generating about 0.04 per unit of risk. If you would invest 2,270 in AVerMedia Technologies on October 14, 2024 and sell it today you would earn a total of 2,365 from holding AVerMedia Technologies or generate 104.19% 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. Gold Rain Enterprises
Performance |
| Timeline |
| AVerMedia Technologies |
| Gold Rain Enterprises |
AVerMedia Technologies and Gold Rain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVerMedia Technologies and Gold Rain
The main advantage of trading using opposite AVerMedia Technologies and Gold Rain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVerMedia Technologies position performs unexpectedly, Gold Rain 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 Gold Rain will offset losses from the drop in Gold Rain's long position.| AVerMedia Technologies vs. Clevo Co | AVerMedia Technologies vs. Zinwell | AVerMedia Technologies vs. Gigastorage Corp | AVerMedia Technologies vs. Shuttle |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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