Correlation Between Yulon Nissan and AVerMedia Technologies

Can any of the company-specific risk be diversified away by investing in both Yulon Nissan 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 Nissan 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 Nissan Motor and AVerMedia Technologies, you can compare the effects of market volatilities on Yulon Nissan 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 Nissan with a short position of AVerMedia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulon Nissan and AVerMedia Technologies.

Diversification Opportunities for Yulon Nissan and AVerMedia Technologies

-0.17

Correlation Coefficient

Yulon Nissan  AVerMedia Technologies

Good diversification

The 3 months correlation between Yulon and AVerMedia is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Nissan Motor and AVerMedia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVerMedia Technologies and Yulon Nissan 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 Nissan Motor 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 Nissan i.e., Yulon Nissan and AVerMedia Technologies go up and down completely randomly.

Pair Corralation between Yulon Nissan and AVerMedia Technologies

Assuming the 90 days trading horizon Yulon Nissan Motor is expected to generate 0.9 times more return on investment than AVerMedia Technologies. However, Yulon Nissan Motor is 1.11 times less risky than AVerMedia Technologies. It trades about -0.03 of its potential returns per unit of risk. AVerMedia Technologies is currently generating about -0.07 per unit of risk. If you would invest  7,560  in Yulon Nissan Motor on December 31, 2024 and sell it today you would lose (500.00) from holding Yulon Nissan Motor or give up 6.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Yulon Nissan Motor  vs.  AVerMedia Technologies

Yulon Nissan Motor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Yulon Nissan Motor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Yulon Nissan is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

AVerMedia Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days AVerMedia Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in May 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Yulon Nissan and AVerMedia Technologies

The main advantage of trading using opposite Yulon Nissan and AVerMedia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon Nissan 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.

The idea behind Yulon Nissan Motor and AVerMedia Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.