Correlation Between Yulon Finance and AVerMedia Technologies
Can any of the company-specific risk be diversified away by investing in both Yulon Finance and AVerMedia Technologies 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 Yulon Finance and AVerMedia Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yulon Finance Corp and AVerMedia Technologies, you can compare the effects of market volatilities on Yulon Finance and AVerMedia Technologies 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 Yulon Finance with a short position of AVerMedia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulon Finance and AVerMedia Technologies.
Diversification Opportunities for Yulon Finance and AVerMedia Technologies
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Yulon and AVerMedia is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Finance Corp and AVerMedia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVerMedia Technologies and Yulon Finance 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 Yulon Finance Corp are associated (or correlated) with AVerMedia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVerMedia Technologies has no effect on the direction of Yulon Finance i.e., Yulon Finance and AVerMedia Technologies go up and down completely randomly.
Pair Corralation between Yulon Finance and AVerMedia Technologies
Assuming the 90 days trading horizon Yulon Finance Corp is expected to under-perform the AVerMedia Technologies. In addition to that, Yulon Finance is 1.17 times more volatile than AVerMedia Technologies. It trades about -0.27 of its total potential returns per unit of risk. AVerMedia Technologies is currently generating about -0.08 per unit of volatility. If you would invest 4,450 in AVerMedia Technologies on August 30, 2024 and sell it today you would lose (285.00) from holding AVerMedia Technologies or give up 6.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yulon Finance Corp vs. AVerMedia Technologies
Performance |
| Timeline |
| Yulon Finance Corp |
| AVerMedia Technologies |
Yulon Finance and AVerMedia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yulon Finance and AVerMedia Technologies
The main advantage of trading using opposite Yulon Finance and AVerMedia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon Finance position performs unexpectedly, AVerMedia Technologies 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 AVerMedia Technologies will offset losses from the drop in AVerMedia Technologies' long position.| Yulon Finance vs. Taiwan Secom Co | Yulon Finance vs. TTET Union Corp | Yulon Finance vs. China Steel Chemical | Yulon Finance vs. Taiwan Shin Kong |
| AVerMedia Technologies vs. Yulon Finance Corp | AVerMedia Technologies vs. Taiwan Secom Co | AVerMedia Technologies vs. Great Wall Enterprise |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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