Correlation Between Asmedia Technology and Chi Hua
Can any of the company-specific risk be diversified away by investing in both Asmedia Technology and Chi Hua 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 Asmedia Technology and Chi Hua into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asmedia Technology and Chi Hua Fitness, you can compare the effects of market volatilities on Asmedia Technology and Chi Hua 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 Asmedia Technology with a short position of Chi Hua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asmedia Technology and Chi Hua.
Diversification Opportunities for Asmedia Technology and Chi Hua
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asmedia and Chi is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Asmedia Technology and Chi Hua Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chi Hua Fitness and Asmedia 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 Asmedia Technology are associated (or correlated) with Chi Hua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chi Hua Fitness has no effect on the direction of Asmedia Technology i.e., Asmedia Technology and Chi Hua go up and down completely randomly.
Pair Corralation between Asmedia Technology and Chi Hua
Assuming the 90 days trading horizon Asmedia Technology is expected to generate 2.35 times more return on investment than Chi Hua. However, Asmedia Technology is 2.35 times more volatile than Chi Hua Fitness. It trades about 0.12 of its potential returns per unit of risk. Chi Hua Fitness is currently generating about -0.1 per unit of risk. If you would invest 150,000 in Asmedia Technology on September 10, 2024 and sell it today you would earn a total of 38,000 from holding Asmedia Technology or generate 25.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Asmedia Technology vs. Chi Hua Fitness
Performance |
Timeline |
Asmedia Technology |
Chi Hua Fitness |
Asmedia Technology and Chi Hua Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Asmedia Technology and Chi Hua
The main advantage of trading using opposite Asmedia Technology and Chi Hua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asmedia Technology position performs unexpectedly, Chi Hua 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 Chi Hua will offset losses from the drop in Chi Hua's long position.Asmedia Technology vs. Alchip Technologies | Asmedia Technology vs. Aspeed Technology | Asmedia Technology vs. Silergy Corp | Asmedia Technology vs. Global Unichip Corp |
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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