Correlation Between DV Biomed and AVY Precision
Can any of the company-specific risk be diversified away by investing in both DV Biomed and AVY Precision 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 DV Biomed and AVY Precision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DV Biomed Co and AVY Precision Technology, you can compare the effects of market volatilities on DV Biomed and AVY Precision 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 DV Biomed with a short position of AVY Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of DV Biomed and AVY Precision.
Diversification Opportunities for DV Biomed and AVY Precision
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 6539 and AVY is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding DV Biomed Co and AVY Precision Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVY Precision Technology and DV Biomed 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 DV Biomed Co are associated (or correlated) with AVY Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVY Precision Technology has no effect on the direction of DV Biomed i.e., DV Biomed and AVY Precision go up and down completely randomly.
Pair Corralation between DV Biomed and AVY Precision
Assuming the 90 days trading horizon DV Biomed Co is expected to under-perform the AVY Precision. In addition to that, DV Biomed is 1.7 times more volatile than AVY Precision Technology. It trades about -0.08 of its total potential returns per unit of risk. AVY Precision Technology is currently generating about 0.03 per unit of volatility. If you would invest 2,415 in AVY Precision Technology on September 12, 2024 and sell it today you would earn a total of 340.00 from holding AVY Precision Technology or generate 14.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.71% |
| Values | Daily Returns |
DV Biomed Co vs. AVY Precision Technology
Performance |
| Timeline |
| DV Biomed |
| AVY Precision Technology |
DV Biomed and AVY Precision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DV Biomed and AVY Precision
The main advantage of trading using opposite DV Biomed and AVY Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DV Biomed position performs unexpectedly, AVY Precision 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 AVY Precision will offset losses from the drop in AVY Precision's long position.| DV Biomed vs. Sunspring Metal Corp | DV Biomed vs. Asia Metal Industries | DV Biomed vs. Mega Financial Holding | DV Biomed vs. Chernan Metal Industrial |
| AVY Precision vs. Ability Enterprise Co | AVY Precision vs. XAC Automation | AVY Precision vs. Cheng Fwa Industrial | AVY Precision vs. Kaulin Mfg |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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