Correlation Between Avalue Technology and Integrated Service
Can any of the company-specific risk be diversified away by investing in both Avalue Technology and Integrated Service 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 Integrated Service into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avalue Technology and Integrated Service Technology, you can compare the effects of market volatilities on Avalue Technology and Integrated Service 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 Integrated Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avalue Technology and Integrated Service.
Diversification Opportunities for Avalue Technology and Integrated Service
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Avalue and Integrated is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Avalue Technology and Integrated Service Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Service 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 Integrated Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Service has no effect on the direction of Avalue Technology i.e., Avalue Technology and Integrated Service go up and down completely randomly.
Pair Corralation between Avalue Technology and Integrated Service
Assuming the 90 days trading horizon Avalue Technology is expected to generate 0.54 times more return on investment than Integrated Service. However, Avalue Technology is 1.87 times less risky than Integrated Service. It trades about -0.07 of its potential returns per unit of risk. Integrated Service Technology is currently generating about -0.44 per unit of risk. If you would invest 10,200 in Avalue Technology on August 30, 2024 and sell it today you would lose (260.00) from holding Avalue Technology or give up 2.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avalue Technology vs. Integrated Service Technology
Performance |
| Timeline |
| Avalue Technology |
| Integrated Service |
Avalue Technology and Integrated Service Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avalue Technology and Integrated Service
The main advantage of trading using opposite Avalue Technology and Integrated Service positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avalue Technology position performs unexpectedly, Integrated Service 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 Integrated Service will offset losses from the drop in Integrated Service's long position.| Avalue Technology vs. International CSRC Investment | Avalue Technology vs. Farglory FTZ Investment | Avalue Technology vs. ReaLy Development Construction | Avalue Technology vs. Chung Hsin Electric Machinery |
| Integrated Service vs. Taiwan Semiconductor Manufacturing | Integrated Service vs. MediaTek | Integrated Service vs. United Microelectronics | Integrated Service vs. Novatek Microelectronics Corp |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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