Correlation Between AV Tech and Chenming Mold
Can any of the company-specific risk be diversified away by investing in both AV Tech and Chenming Mold 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 AV Tech and Chenming Mold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AV Tech Corp and Chenming Mold Industrial, you can compare the effects of market volatilities on AV Tech and Chenming Mold 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 AV Tech with a short position of Chenming Mold. Check out your portfolio center. Please also check ongoing floating volatility patterns of AV Tech and Chenming Mold.
Diversification Opportunities for AV Tech and Chenming Mold
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 8072 and Chenming is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding AV Tech Corp and Chenming Mold Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chenming Mold Industrial and AV Tech 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 AV Tech Corp are associated (or correlated) with Chenming Mold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chenming Mold Industrial has no effect on the direction of AV Tech i.e., AV Tech and Chenming Mold go up and down completely randomly.
Pair Corralation between AV Tech and Chenming Mold
Assuming the 90 days trading horizon AV Tech Corp is expected to under-perform the Chenming Mold. But the stock apears to be less risky and, when comparing its historical volatility, AV Tech Corp is 2.49 times less risky than Chenming Mold. The stock trades about 0.0 of its potential returns per unit of risk. The Chenming Mold Industrial is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,645 in Chenming Mold Industrial on August 30, 2024 and sell it today you would earn a total of 12,405 from holding Chenming Mold Industrial or generate 754.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AV Tech Corp vs. Chenming Mold Industrial
Performance |
| Timeline |
| AV Tech Corp |
| Chenming Mold Industrial |
AV Tech and Chenming Mold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AV Tech and Chenming Mold
The main advantage of trading using opposite AV Tech and Chenming Mold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AV Tech position performs unexpectedly, Chenming Mold 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 Chenming Mold will offset losses from the drop in Chenming Mold's long position.| AV Tech vs. AVerMedia Technologies | AV Tech vs. Zinwell | AV Tech vs. In Win Development | AV Tech vs. Chenming Mold Industrial |
| Chenming Mold vs. Clevo Co | Chenming Mold vs. Zinwell | Chenming Mold vs. Min Aik Technology | Chenming Mold vs. Promise Technology |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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