Correlation Between Chaintech Technology and AVerMedia Technologies
Can any of the company-specific risk be diversified away by investing in both Chaintech Technology and AVerMedia Technologies 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 Chaintech Technology and AVerMedia Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chaintech Technology Corp and AVerMedia Technologies, you can compare the effects of market volatilities on Chaintech Technology and AVerMedia Technologies 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 Chaintech Technology with a short position of AVerMedia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chaintech Technology and AVerMedia Technologies.
Diversification Opportunities for Chaintech Technology and AVerMedia Technologies
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chaintech and AVerMedia is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Chaintech Technology Corp and AVerMedia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVerMedia Technologies and Chaintech Technology 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 Chaintech Technology Corp are associated (or correlated) with AVerMedia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVerMedia Technologies has no effect on the direction of Chaintech Technology i.e., Chaintech Technology and AVerMedia Technologies go up and down completely randomly.
Pair Corralation between Chaintech Technology and AVerMedia Technologies
Assuming the 90 days trading horizon Chaintech Technology is expected to generate 6.83 times less return on investment than AVerMedia Technologies. But when comparing it to its historical volatility, Chaintech Technology Corp is 1.2 times less risky than AVerMedia Technologies. It trades about 0.01 of its potential returns per unit of risk. AVerMedia Technologies is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,185 in AVerMedia Technologies on August 31, 2024 and sell it today you would earn a total of 1,925 from holding AVerMedia Technologies or generate 88.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chaintech Technology Corp vs. AVerMedia Technologies
Performance |
| Timeline |
| Chaintech Technology Corp |
| AVerMedia Technologies |
Chaintech Technology and AVerMedia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chaintech Technology and AVerMedia Technologies
The main advantage of trading using opposite Chaintech Technology and AVerMedia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chaintech Technology position performs unexpectedly, AVerMedia Technologies 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 AVerMedia Technologies will offset losses from the drop in AVerMedia Technologies' long position.| Chaintech Technology vs. Biostar Microtech International | Chaintech Technology vs. Elitegroup Computer Systems | Chaintech Technology vs. Shuttle | Chaintech Technology vs. Gigabyte Technology Co |
| AVerMedia Technologies vs. Clevo Co | AVerMedia Technologies vs. Zinwell | AVerMedia Technologies vs. Gigastorage Corp | AVerMedia Technologies vs. Shuttle |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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