Correlation Between KYE Systems and AVerMedia Technologies
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
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 Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
KYE Systems Corp vs. AVerMedia Technologies
Performance |
Timeline |
KYE Systems Corp |
AVerMedia Technologies |
KYE Systems and AVerMedia Technologies Volatility Contrast
Predicted Return Density |
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.KYE Systems vs. Avision | ||
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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