Correlation Between KYE Systems and AVerMedia Technologies

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Can any of the company-specific risk be diversified away by investing in both KYE Systems 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 KYE Systems and AVerMedia Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KYE Systems Corp and AVerMedia Technologies, you can compare the effects of market volatilities on KYE Systems 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 KYE Systems with a short position of AVerMedia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of KYE Systems and AVerMedia Technologies.

Diversification Opportunities for KYE Systems and AVerMedia Technologies

KYEAVerMediaDiversified AwayKYEAVerMediaDiversified Away100%
0.28
  Correlation Coefficient

Modest diversification

The 3 months correlation between KYE and AVerMedia is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding KYE Systems Corp and AVerMedia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVerMedia Technologies and KYE Systems 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 KYE Systems 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 KYE Systems i.e., KYE Systems and AVerMedia Technologies go up and down completely randomly.

Pair Corralation between KYE Systems and AVerMedia Technologies

Assuming the 90 days trading horizon KYE Systems is expected to generate 82.17 times less return on investment than AVerMedia Technologies. In addition to that, KYE Systems is 1.12 times more volatile than AVerMedia Technologies. It trades about 0.0 of its total potential returns per unit of risk. AVerMedia Technologies is currently generating about 0.12 per unit of volatility. If you would invest  4,005  in AVerMedia Technologies on October 31, 2024 and sell it today you would earn a total of  805.00  from holding AVerMedia Technologies or generate 20.1% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

KYE Systems Corp  vs.  AVerMedia Technologies

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -20-10010
JavaScript chart by amCharts 3.21.152365 2417
       Timeline  
KYE Systems Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days KYE Systems Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, KYE Systems is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan40424446485052
AVerMedia Technologies 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in AVerMedia Technologies are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, AVerMedia Technologies showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan40424446485052

KYE Systems and AVerMedia Technologies Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.02-3.76-2.5-1.240.02011.192.43.614.81 0.0350.0400.0450.050
JavaScript chart by amCharts 3.21.152365 2417
       Returns  

Pair Trading with KYE Systems and AVerMedia Technologies

The main advantage of trading using opposite KYE Systems and AVerMedia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KYE Systems 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 KYE Systems Corp 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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