Correlation Between Avalue Technology and Shiny Chemical
Can any of the company-specific risk be diversified away by investing in both Avalue Technology and Shiny Chemical 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 Avalue Technology and Shiny Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avalue Technology and Shiny Chemical Industrial, you can compare the effects of market volatilities on Avalue Technology and Shiny Chemical 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 Avalue Technology with a short position of Shiny Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avalue Technology and Shiny Chemical.
Diversification Opportunities for Avalue Technology and Shiny Chemical
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Avalue and Shiny is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Avalue Technology and Shiny Chemical Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shiny Chemical Industrial and Avalue 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 Avalue Technology are associated (or correlated) with Shiny Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shiny Chemical Industrial has no effect on the direction of Avalue Technology i.e., Avalue Technology and Shiny Chemical go up and down completely randomly.
Pair Corralation between Avalue Technology and Shiny Chemical
Assuming the 90 days trading horizon Avalue Technology is expected to generate 1.33 times more return on investment than Shiny Chemical. However, Avalue Technology is 1.33 times more volatile than Shiny Chemical Industrial. It trades about 0.05 of its potential returns per unit of risk. Shiny Chemical Industrial is currently generating about 0.05 per unit of risk. If you would invest 5,980 in Avalue Technology on August 30, 2024 and sell it today you would earn a total of 3,960 from holding Avalue Technology or generate 66.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avalue Technology vs. Shiny Chemical Industrial
Performance |
| Timeline |
| Avalue Technology |
| Shiny Chemical Industrial |
Avalue Technology and Shiny Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avalue Technology and Shiny Chemical
The main advantage of trading using opposite Avalue Technology and Shiny Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avalue Technology position performs unexpectedly, Shiny Chemical 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 Shiny Chemical will offset losses from the drop in Shiny Chemical's long position.| Avalue Technology vs. Qisda Corp | Avalue Technology vs. Quanta Computer | Avalue Technology vs. Coretronic | Avalue Technology vs. Wistron Corp |
| Shiny Chemical vs. China Steel Chemical | Shiny Chemical vs. TTET Union Corp | Shiny Chemical vs. Eternal Materials Co | Shiny Chemical vs. Yung Chi Paint |
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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