Correlation Between AVerMedia Technologies and Wan Hai
Can any of the company-specific risk be diversified away by investing in both AVerMedia Technologies and Wan Hai 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 Wan Hai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVerMedia Technologies and Wan Hai Lines, you can compare the effects of market volatilities on AVerMedia Technologies and Wan Hai 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 Wan Hai. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVerMedia Technologies and Wan Hai.
Diversification Opportunities for AVerMedia Technologies and Wan Hai
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AVerMedia and Wan is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding AVerMedia Technologies and Wan Hai Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wan Hai Lines 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 Wan Hai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wan Hai Lines has no effect on the direction of AVerMedia Technologies i.e., AVerMedia Technologies and Wan Hai go up and down completely randomly.
Pair Corralation between AVerMedia Technologies and Wan Hai
Assuming the 90 days trading horizon AVerMedia Technologies is expected to generate 1.59 times more return on investment than Wan Hai. However, AVerMedia Technologies is 1.59 times more volatile than Wan Hai Lines. It trades about 0.04 of its potential returns per unit of risk. Wan Hai Lines is currently generating about 0.02 per unit of risk. If you would invest 4,940 in AVerMedia Technologies on December 2, 2024 and sell it today you would earn a total of 160.00 from holding AVerMedia Technologies or generate 3.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
AVerMedia Technologies vs. Wan Hai Lines
Performance |
Timeline |
AVerMedia Technologies |
Wan Hai Lines |
AVerMedia Technologies and Wan Hai Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AVerMedia Technologies and Wan Hai
The main advantage of trading using opposite AVerMedia Technologies and Wan Hai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVerMedia Technologies position performs unexpectedly, Wan Hai 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 Wan Hai will offset losses from the drop in Wan Hai's long position.AVerMedia Technologies vs. Clevo Co | AVerMedia Technologies vs. Zinwell | AVerMedia Technologies vs. Gigastorage Corp | AVerMedia Technologies vs. Shuttle |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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