Correlation Between AVerMedia Technologies and KYE Systems

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

Diversification Opportunities for AVerMedia Technologies and KYE Systems

AVerMediaKYEDiversified AwayAVerMediaKYEDiversified Away100%
0.28
  Correlation Coefficient

Modest diversification

The 3 months correlation between AVerMedia and KYE is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding AVerMedia Technologies and KYE Systems Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KYE Systems Corp 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 KYE Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KYE Systems Corp has no effect on the direction of AVerMedia Technologies i.e., AVerMedia Technologies and KYE Systems go up and down completely randomly.

Pair Corralation between AVerMedia Technologies and KYE Systems

Assuming the 90 days trading horizon AVerMedia Technologies is expected to generate 0.89 times more return on investment than KYE Systems. However, AVerMedia Technologies is 1.12 times less risky than KYE Systems. It trades about 0.12 of its potential returns per unit of risk. KYE Systems Corp is currently generating about 0.0 per unit of risk. 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

AVerMedia Technologies  vs.  KYE Systems Corp

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -20-10010
JavaScript chart by amCharts 3.21.152417 2365
       Timeline  
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 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 and KYE Systems Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-8.6-6.44-4.28-2.120.02.24.456.698.93 0.0200.0250.0300.0350.0400.0450.050
JavaScript chart by amCharts 3.21.152417 2365
       Returns  

Pair Trading with AVerMedia Technologies and KYE Systems

The main advantage of trading using opposite AVerMedia Technologies and KYE Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVerMedia Technologies position performs unexpectedly, KYE Systems 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 KYE Systems will offset losses from the drop in KYE Systems' long position.
The idea behind AVerMedia Technologies and KYE Systems Corp 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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