Correlation Between Aspeed Technology and AVer Information

Can any of the company-specific risk be diversified away by investing in both Aspeed Technology and AVer Information 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 Aspeed Technology and AVer Information into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aspeed Technology and AVer Information, you can compare the effects of market volatilities on Aspeed Technology and AVer Information 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 Aspeed Technology with a short position of AVer Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspeed Technology and AVer Information.

Diversification Opportunities for Aspeed Technology and AVer Information

0.23

Correlation Coefficient

Aspeed Technology  AVer Information

Modest diversification

The 3 months correlation between Aspeed and AVer is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Aspeed Technology and AVer Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVer Information and Aspeed Technology 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 Aspeed Technology are associated (or correlated) with AVer Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVer Information has no effect on the direction of Aspeed Technology i.e., Aspeed Technology and AVer Information go up and down completely randomly.

Pair Corralation between Aspeed Technology and AVer Information

Assuming the 90 days trading horizon Aspeed Technology is expected to under-perform the AVer Information. In addition to that, Aspeed Technology is 2.27 times more volatile than AVer Information. It trades about -0.07 of its total potential returns per unit of risk. AVer Information is currently generating about 0.02 per unit of volatility. If you would invest  4,155  in AVer Information on December 3, 2024 and sell it today you would earn a total of  50.00  from holding AVer Information or generate 1.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Aspeed Technology  vs.  AVer Information

Aspeed Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aspeed Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

AVer Information

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AVer Information are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, AVer Information is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Aspeed Technology and AVer Information

The main advantage of trading using opposite Aspeed Technology and AVer Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspeed Technology position performs unexpectedly, AVer Information 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 AVer Information will offset losses from the drop in AVer Information's long position.

The idea behind Aspeed Technology and AVer Information 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.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.