Correlation Between VIA Labs and Avalue Technology
Can any of the company-specific risk be diversified away by investing in both VIA Labs and Avalue Technology 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 VIA Labs and Avalue Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIA Labs and Avalue Technology, you can compare the effects of market volatilities on VIA Labs and Avalue Technology 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 VIA Labs with a short position of Avalue Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIA Labs and Avalue Technology.
Diversification Opportunities for VIA Labs and Avalue Technology
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VIA and Avalue is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding VIA Labs and Avalue Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avalue Technology and VIA Labs 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 VIA Labs are associated (or correlated) with Avalue Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avalue Technology has no effect on the direction of VIA Labs i.e., VIA Labs and Avalue Technology go up and down completely randomly.
Pair Corralation between VIA Labs and Avalue Technology
Assuming the 90 days trading horizon VIA Labs is expected to under-perform the Avalue Technology. But the stock apears to be less risky and, when comparing its historical volatility, VIA Labs is 1.02 times less risky than Avalue Technology. The stock trades about -0.02 of its potential returns per unit of risk. The Avalue Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,989 in Avalue Technology on August 29, 2024 and sell it today you would earn a total of 3,951 from holding Avalue Technology or generate 65.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VIA Labs vs. Avalue Technology
Performance |
| Timeline |
| VIA Labs |
| Avalue Technology |
VIA Labs and Avalue Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIA Labs and Avalue Technology
The main advantage of trading using opposite VIA Labs and Avalue Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIA Labs position performs unexpectedly, Avalue Technology 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 Avalue Technology will offset losses from the drop in Avalue Technology's long position.| VIA Labs vs. Asmedia Technology | VIA Labs vs. Global Unichip Corp | VIA Labs vs. Alchip Technologies | VIA Labs vs. Kinsus Interconnect Technology |
| Avalue Technology vs. Qisda Corp | Avalue Technology vs. Quanta Computer | Avalue Technology vs. Coretronic | Avalue Technology vs. Wistron Corp |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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