Correlation Between Meiloon Industrial and Avalue Technology
Can any of the company-specific risk be diversified away by investing in both Meiloon Industrial and Avalue Technology 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 Meiloon Industrial and Avalue Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meiloon Industrial Co and Avalue Technology, you can compare the effects of market volatilities on Meiloon Industrial and Avalue Technology 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 Meiloon Industrial with a short position of Avalue Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiloon Industrial and Avalue Technology.
Diversification Opportunities for Meiloon Industrial and Avalue Technology
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Meiloon and Avalue is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Meiloon Industrial Co and Avalue Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avalue Technology and Meiloon Industrial 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 Meiloon Industrial Co are associated (or correlated) with Avalue Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avalue Technology has no effect on the direction of Meiloon Industrial i.e., Meiloon Industrial and Avalue Technology go up and down completely randomly.
Pair Corralation between Meiloon Industrial and Avalue Technology
Assuming the 90 days trading horizon Meiloon Industrial is expected to generate 1.14 times less return on investment than Avalue Technology. But when comparing it to its historical volatility, Meiloon Industrial Co is 1.13 times less risky than Avalue Technology. It trades about 0.05 of its potential returns per unit of risk. Avalue Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5,942 in Avalue Technology on August 26, 2024 and sell it today you would earn a total of 4,108 from holding Avalue Technology or generate 69.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meiloon Industrial Co vs. Avalue Technology
Performance |
| Timeline |
| Meiloon Industrial |
| Avalue Technology |
Meiloon Industrial and Avalue Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiloon Industrial and Avalue Technology
The main advantage of trading using opposite Meiloon Industrial and Avalue Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiloon Industrial position performs unexpectedly, Avalue Technology 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 Avalue Technology will offset losses from the drop in Avalue Technology's long position.| Meiloon Industrial vs. Taiwan Semiconductor Manufacturing | Meiloon Industrial vs. Hon Hai Precision | Meiloon Industrial vs. MediaTek | Meiloon Industrial vs. Chunghwa Telecom Co |
| Avalue Technology vs. Shih Kuen Plastics | Avalue Technology vs. Elite Material Co | Avalue Technology vs. Meiloon Industrial Co | Avalue Technology vs. Shiny Chemical Industrial |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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