Correlation Between AVer Information and Cameo Communications
Can any of the company-specific risk be diversified away by investing in both AVer Information and Cameo Communications 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 AVer Information and Cameo Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVer Information and Cameo Communications, you can compare the effects of market volatilities on AVer Information and Cameo Communications 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 AVer Information with a short position of Cameo Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVer Information and Cameo Communications.
Diversification Opportunities for AVer Information and Cameo Communications
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AVer and Cameo is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding AVer Information and Cameo Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cameo Communications and AVer Information 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 AVer Information are associated (or correlated) with Cameo Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cameo Communications has no effect on the direction of AVer Information i.e., AVer Information and Cameo Communications go up and down completely randomly.
Pair Corralation between AVer Information and Cameo Communications
Assuming the 90 days trading horizon AVer Information is expected to under-perform the Cameo Communications. But the stock apears to be less risky and, when comparing its historical volatility, AVer Information is 1.94 times less risky than Cameo Communications. The stock trades about -0.23 of its potential returns per unit of risk. The Cameo Communications is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 1,200 in Cameo Communications on September 3, 2024 and sell it today you would lose (50.00) from holding Cameo Communications or give up 4.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AVer Information vs. Cameo Communications
Performance |
| Timeline |
| AVer Information |
| Cameo Communications |
AVer Information and Cameo Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVer Information and Cameo Communications
The main advantage of trading using opposite AVer Information and Cameo Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVer Information position performs unexpectedly, Cameo Communications 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 Cameo Communications will offset losses from the drop in Cameo Communications' long position.| AVer Information vs. Taiwan Semiconductor Manufacturing | AVer Information vs. Yang Ming Marine | AVer Information vs. ASE Industrial Holding | AVer Information vs. AU Optronics |
| Cameo Communications vs. Taiwan Semiconductor Manufacturing | Cameo Communications vs. Yang Ming Marine | Cameo Communications vs. ASE Industrial Holding | Cameo Communications vs. AU Optronics |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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