Correlation Between Avalue Technology and Icares Medicus
Can any of the company-specific risk be diversified away by investing in both Avalue Technology and Icares Medicus 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 Icares Medicus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avalue Technology and Icares Medicus, you can compare the effects of market volatilities on Avalue Technology and Icares Medicus 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 Icares Medicus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avalue Technology and Icares Medicus.
Diversification Opportunities for Avalue Technology and Icares Medicus
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Avalue and Icares is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Avalue Technology and Icares Medicus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icares Medicus 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 Icares Medicus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icares Medicus has no effect on the direction of Avalue Technology i.e., Avalue Technology and Icares Medicus go up and down completely randomly.
Pair Corralation between Avalue Technology and Icares Medicus
Assuming the 90 days trading horizon Avalue Technology is expected to generate 0.85 times more return on investment than Icares Medicus. However, Avalue Technology is 1.18 times less risky than Icares Medicus. It trades about -0.01 of its potential returns per unit of risk. Icares Medicus is currently generating about -0.02 per unit of risk. If you would invest 11,212 in Avalue Technology on September 2, 2024 and sell it today you would lose (1,462) from holding Avalue Technology or give up 13.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avalue Technology vs. Icares Medicus
Performance |
| Timeline |
| Avalue Technology |
| Icares Medicus |
Avalue Technology and Icares Medicus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avalue Technology and Icares Medicus
The main advantage of trading using opposite Avalue Technology and Icares Medicus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avalue Technology position performs unexpectedly, Icares Medicus 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 Icares Medicus will offset losses from the drop in Icares Medicus' long position.| Avalue Technology vs. Quanta Computer | Avalue Technology vs. Wiwynn Corp | Avalue Technology vs. Getac Technology Corp | Avalue Technology vs. InnoDisk |
| Icares Medicus vs. PChome Online | Icares Medicus vs. Phytohealth Corp | Icares Medicus vs. RiTdisplay Corp | Icares Medicus vs. Quanta Computer |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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