Correlation Between Advanced Wireless and AVer Information
Can any of the company-specific risk be diversified away by investing in both Advanced Wireless and AVer Information 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 Advanced Wireless and AVer Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Wireless Semiconductor and AVer Information, you can compare the effects of market volatilities on Advanced Wireless and AVer Information 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 Advanced Wireless with a short position of AVer Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Wireless and AVer Information.
Diversification Opportunities for Advanced Wireless and AVer Information
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Advanced and AVer is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Wireless Semiconducto and AVer Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVer Information and Advanced Wireless 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 Advanced Wireless Semiconductor are associated (or correlated) with AVer Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVer Information has no effect on the direction of Advanced Wireless i.e., Advanced Wireless and AVer Information go up and down completely randomly.
Pair Corralation between Advanced Wireless and AVer Information
Assuming the 90 days trading horizon Advanced Wireless Semiconductor is expected to generate 2.4 times more return on investment than AVer Information. However, Advanced Wireless is 2.4 times more volatile than AVer Information. It trades about -0.03 of its potential returns per unit of risk. AVer Information is currently generating about -0.22 per unit of risk. If you would invest 10,300 in Advanced Wireless Semiconductor on October 20, 2024 and sell it today you would lose (400.00) from holding Advanced Wireless Semiconductor or give up 3.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Advanced Wireless Semiconducto vs. AVer Information
Performance |
| Timeline |
| Advanced Wireless |
| AVer Information |
Advanced Wireless and AVer Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Wireless and AVer Information
The main advantage of trading using opposite Advanced Wireless and AVer Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Wireless position performs unexpectedly, AVer Information 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 AVer Information will offset losses from the drop in AVer Information's long position.| Advanced Wireless vs. WIN Semiconductors | Advanced Wireless vs. Visual Photonics Epitaxy | Advanced Wireless vs. GlobalWafers Co | Advanced Wireless vs. Unimicron Technology Corp |
| AVer Information vs. Posiflex Technology | AVer Information vs. ANJI Technology Co | AVer Information vs. AzureWave Technologies | AVer Information vs. Yuan High Tech Development |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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