Correlation Between AVerMedia Technologies and Farglory FTZ
Can any of the company-specific risk be diversified away by investing in both AVerMedia Technologies and Farglory FTZ 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 Farglory FTZ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVerMedia Technologies and Farglory FTZ Investment, you can compare the effects of market volatilities on AVerMedia Technologies and Farglory FTZ 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 Farglory FTZ. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVerMedia Technologies and Farglory FTZ.
Diversification Opportunities for AVerMedia Technologies and Farglory FTZ
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AVerMedia and Farglory is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding AVerMedia Technologies and Farglory FTZ Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farglory FTZ Investment 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 Farglory FTZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farglory FTZ Investment has no effect on the direction of AVerMedia Technologies i.e., AVerMedia Technologies and Farglory FTZ go up and down completely randomly.
Pair Corralation between AVerMedia Technologies and Farglory FTZ
Assuming the 90 days trading horizon AVerMedia Technologies is expected to under-perform the Farglory FTZ. In addition to that, AVerMedia Technologies is 1.65 times more volatile than Farglory FTZ Investment. It trades about -0.1 of its total potential returns per unit of risk. Farglory FTZ Investment is currently generating about -0.16 per unit of volatility. If you would invest 4,740 in Farglory FTZ Investment on September 3, 2024 and sell it today you would lose (335.00) from holding Farglory FTZ Investment or give up 7.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AVerMedia Technologies vs. Farglory FTZ Investment
Performance |
| Timeline |
| AVerMedia Technologies |
| Farglory FTZ Investment |
AVerMedia Technologies and Farglory FTZ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVerMedia Technologies and Farglory FTZ
The main advantage of trading using opposite AVerMedia Technologies and Farglory FTZ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVerMedia Technologies position performs unexpectedly, Farglory FTZ 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 Farglory FTZ will offset losses from the drop in Farglory FTZ's long position.| AVerMedia Technologies vs. Clevo Co | AVerMedia Technologies vs. Zinwell | AVerMedia Technologies vs. Gigastorage Corp | AVerMedia Technologies vs. Shuttle |
| Farglory FTZ vs. Universal Microelectronics Co | Farglory FTZ vs. AVerMedia Technologies | Farglory FTZ vs. Symtek Automation Asia | Farglory FTZ 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 CEOs Directory module to screen CEOs from public companies around the world.
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