Correlation Between AVer Information and Te Chang

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

Diversification Opportunities for AVer Information and Te Chang

AVer5511Diversified AwayAVer5511Diversified Away100%
-0.8
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between AVer and 5511 is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding AVer Information and Te Chang Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Te Chang Construction and AVer Information 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 AVer Information are associated (or correlated) with Te Chang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Te Chang Construction has no effect on the direction of AVer Information i.e., AVer Information and Te Chang go up and down completely randomly.

Pair Corralation between AVer Information and Te Chang

Assuming the 90 days trading horizon AVer Information is expected to under-perform the Te Chang. In addition to that, AVer Information is 1.35 times more volatile than Te Chang Construction. It trades about -0.14 of its total potential returns per unit of risk. Te Chang Construction is currently generating about 0.2 per unit of volatility. If you would invest  5,650  in Te Chang Construction on October 5, 2024 and sell it today you would earn a total of  710.00  from holding Te Chang Construction or generate 12.57% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

AVer Information  vs.  Te Chang Construction

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -15-10-50510
JavaScript chart by amCharts 3.21.153669 5511
       Timeline  
AVer Information 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days AVer Information has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan41424344454647
Te Chang Construction 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Te Chang Construction are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Te Chang may actually be approaching a critical reversion point that can send shares even higher in February 2025.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan56575859606162636465

AVer Information and Te Chang Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.25-1.73-1.21-0.69-0.170.30.821.341.862.38 0.10.20.30.4
JavaScript chart by amCharts 3.21.153669 5511
       Returns  

Pair Trading with AVer Information and Te Chang

The main advantage of trading using opposite AVer Information and Te Chang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVer Information position performs unexpectedly, Te Chang 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 Te Chang will offset losses from the drop in Te Chang's long position.
The idea behind AVer Information and Te Chang Construction 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.

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