Correlation Between Avalue Technology and Chicony Power
Can any of the company-specific risk be diversified away by investing in both Avalue Technology and Chicony Power 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 Chicony Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avalue Technology and Chicony Power Technology, you can compare the effects of market volatilities on Avalue Technology and Chicony Power 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 Chicony Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avalue Technology and Chicony Power.
Diversification Opportunities for Avalue Technology and Chicony Power
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Avalue and Chicony is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Avalue Technology and Chicony Power Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chicony Power Technology 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 Chicony Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chicony Power Technology has no effect on the direction of Avalue Technology i.e., Avalue Technology and Chicony Power go up and down completely randomly.
Pair Corralation between Avalue Technology and Chicony Power
Assuming the 90 days trading horizon Avalue Technology is expected to generate 2.1 times less return on investment than Chicony Power. But when comparing it to its historical volatility, Avalue Technology is 1.1 times less risky than Chicony Power. It trades about 0.01 of its potential returns per unit of risk. Chicony Power Technology is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 11,600 in Chicony Power Technology on August 29, 2024 and sell it today you would earn a total of 1,000.00 from holding Chicony Power Technology or generate 8.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.65% |
| Values | Daily Returns |
Avalue Technology vs. Chicony Power Technology
Performance |
| Timeline |
| Avalue Technology |
| Chicony Power Technology |
Avalue Technology and Chicony Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avalue Technology and Chicony Power
The main advantage of trading using opposite Avalue Technology and Chicony Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avalue Technology position performs unexpectedly, Chicony Power 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 Chicony Power will offset losses from the drop in Chicony Power's long position.| Avalue Technology vs. Qisda Corp | Avalue Technology vs. Quanta Computer | Avalue Technology vs. Coretronic | Avalue Technology vs. Wistron Corp |
| Chicony Power vs. Merry Electronics Co | Chicony Power vs. E Lead Electronic Co | Chicony Power vs. Heran Co | Chicony Power vs. Zeng Hsing 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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