Correlation Between AVer Information and U Media
Can any of the company-specific risk be diversified away by investing in both AVer Information and U Media 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 U Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVer Information and U Media Communications, you can compare the effects of market volatilities on AVer Information and U Media 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 U Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVer Information and U Media.
Diversification Opportunities for AVer Information and U Media
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AVer and 6470 is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding AVer Information and U Media Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Media 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 U Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Media Communications has no effect on the direction of AVer Information i.e., AVer Information and U Media go up and down completely randomly.
Pair Corralation between AVer Information and U Media
Assuming the 90 days trading horizon AVer Information is expected to generate 0.81 times more return on investment than U Media. However, AVer Information is 1.24 times less risky than U Media. It trades about -0.33 of its potential returns per unit of risk. U Media Communications is currently generating about -0.27 per unit of risk. If you would invest 4,440 in AVer Information on October 26, 2024 and sell it today you would lose (400.00) from holding AVer Information or give up 9.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AVer Information vs. U Media Communications
Performance |
| Timeline |
| AVer Information |
| U Media Communications |
AVer Information and U Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVer Information and U Media
The main advantage of trading using opposite AVer Information and U Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVer Information position performs unexpectedly, U Media 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 U Media will offset losses from the drop in U Media's long position.| AVer Information vs. Elite Semiconductor Memory | AVer Information vs. PChome Online | AVer Information vs. WiseChip Semiconductor | AVer Information vs. Syntek Semiconductor Co |
| U Media vs. Sunfar Computer Co | U Media vs. Asustek Computer | U Media vs. Silicon Power Computer | U Media vs. SS Healthcare Holding |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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