Correlation Between AVerMedia Technologies and Provision Information
Can any of the company-specific risk be diversified away by investing in both AVerMedia Technologies and Provision Information 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 Provision Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVerMedia Technologies and Provision Information CoLtd, you can compare the effects of market volatilities on AVerMedia Technologies and Provision Information 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 Provision Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVerMedia Technologies and Provision Information.
Diversification Opportunities for AVerMedia Technologies and Provision Information
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AVerMedia and Provision is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding AVerMedia Technologies and Provision Information CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Provision Information 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 Provision Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Provision Information has no effect on the direction of AVerMedia Technologies i.e., AVerMedia Technologies and Provision Information go up and down completely randomly.
Pair Corralation between AVerMedia Technologies and Provision Information
Assuming the 90 days trading horizon AVerMedia Technologies is expected to generate 4.04 times more return on investment than Provision Information. However, AVerMedia Technologies is 4.04 times more volatile than Provision Information CoLtd. It trades about -0.02 of its potential returns per unit of risk. Provision Information CoLtd is currently generating about -0.14 per unit of risk. If you would invest 4,830 in AVerMedia Technologies on October 23, 2024 and sell it today you would lose (120.00) from holding AVerMedia Technologies or give up 2.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AVerMedia Technologies vs. Provision Information CoLtd
Performance |
| Timeline |
| AVerMedia Technologies |
| Provision Information |
AVerMedia Technologies and Provision Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVerMedia Technologies and Provision Information
The main advantage of trading using opposite AVerMedia Technologies and Provision Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVerMedia Technologies position performs unexpectedly, Provision Information 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 Provision Information will offset losses from the drop in Provision Information's long position.| AVerMedia Technologies vs. Clevo Co | AVerMedia Technologies vs. Zinwell | AVerMedia Technologies vs. Gigastorage Corp | AVerMedia Technologies vs. Shuttle |
| Provision Information vs. Sporton International | Provision Information vs. Shan Loong Transportation Co | Provision Information vs. Camellia Metal Co | Provision Information vs. Taiwan Mobile Co |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |