Correlation Between AVerMedia Technologies and Green World
Can any of the company-specific risk be diversified away by investing in both AVerMedia Technologies and Green World 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 Green World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVerMedia Technologies and Green World Fintech, you can compare the effects of market volatilities on AVerMedia Technologies and Green World 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 Green World. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVerMedia Technologies and Green World.
Diversification Opportunities for AVerMedia Technologies and Green World
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AVerMedia and Green is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding AVerMedia Technologies and Green World Fintech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green World Fintech 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 Green World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green World Fintech has no effect on the direction of AVerMedia Technologies i.e., AVerMedia Technologies and Green World go up and down completely randomly.
Pair Corralation between AVerMedia Technologies and Green World
Assuming the 90 days trading horizon AVerMedia Technologies is expected to generate 1.72 times less return on investment than Green World. But when comparing it to its historical volatility, AVerMedia Technologies is 1.05 times less risky than Green World. It trades about 0.05 of its potential returns per unit of risk. Green World Fintech is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,241 in Green World Fintech on September 2, 2024 and sell it today you would earn a total of 4,619 from holding Green World Fintech or generate 206.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
AVerMedia Technologies vs. Green World Fintech
Performance |
| Timeline |
| AVerMedia Technologies |
| Green World Fintech |
AVerMedia Technologies and Green World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVerMedia Technologies and Green World
The main advantage of trading using opposite AVerMedia Technologies and Green World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVerMedia Technologies position performs unexpectedly, Green World 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 Green World will offset losses from the drop in Green World's long position.| AVerMedia Technologies vs. Chaintech Technology Corp | AVerMedia Technologies vs. Avision | AVerMedia Technologies vs. Clevo Co | AVerMedia Technologies vs. Elitegroup Computer Systems |
| Green World vs. Intai Technology | Green World vs. AVerMedia Technologies | Green World vs. Wholetech System Hitech | Green World vs. United Radiant Technology |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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