Correlation Between AVerMedia Technologies and Jean
Can any of the company-specific risk be diversified away by investing in both AVerMedia Technologies and Jean 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 AVerMedia Technologies and Jean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVerMedia Technologies and Jean Co, you can compare the effects of market volatilities on AVerMedia Technologies and Jean 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 AVerMedia Technologies with a short position of Jean. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVerMedia Technologies and Jean.
Diversification Opportunities for AVerMedia Technologies and Jean
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AVerMedia and Jean is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding AVerMedia Technologies and Jean Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jean and AVerMedia Technologies 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 AVerMedia Technologies are associated (or correlated) with Jean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jean has no effect on the direction of AVerMedia Technologies i.e., AVerMedia Technologies and Jean go up and down completely randomly.
Pair Corralation between AVerMedia Technologies and Jean
Assuming the 90 days trading horizon AVerMedia Technologies is expected to generate 1.1 times more return on investment than Jean. However, AVerMedia Technologies is 1.1 times more volatile than Jean Co. It trades about 0.02 of its potential returns per unit of risk. Jean Co is currently generating about -0.1 per unit of risk. If you would invest 4,640 in AVerMedia Technologies on September 24, 2024 and sell it today you would earn a total of 75.00 from holding AVerMedia Technologies or generate 1.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
AVerMedia Technologies vs. Jean Co
Performance |
Timeline |
AVerMedia Technologies |
Jean |
AVerMedia Technologies and Jean Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AVerMedia Technologies and Jean
The main advantage of trading using opposite AVerMedia Technologies and Jean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVerMedia Technologies position performs unexpectedly, Jean 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 Jean will offset losses from the drop in Jean's long position.AVerMedia Technologies vs. Merida Industry Co | AVerMedia Technologies vs. Cheng Shin Rubber | AVerMedia Technologies vs. Uni President Enterprises Corp | AVerMedia Technologies vs. Pou Chen Corp |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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