Correlation Between Chi Hua and Asmedia Technology
Can any of the company-specific risk be diversified away by investing in both Chi Hua and Asmedia Technology 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 Chi Hua and Asmedia Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chi Hua Fitness and Asmedia Technology, you can compare the effects of market volatilities on Chi Hua and Asmedia Technology 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 Chi Hua with a short position of Asmedia Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chi Hua and Asmedia Technology.
Diversification Opportunities for Chi Hua and Asmedia Technology
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chi and Asmedia is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Chi Hua Fitness and Asmedia Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asmedia Technology and Chi Hua 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 Chi Hua Fitness are associated (or correlated) with Asmedia Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asmedia Technology has no effect on the direction of Chi Hua i.e., Chi Hua and Asmedia Technology go up and down completely randomly.
Pair Corralation between Chi Hua and Asmedia Technology
Assuming the 90 days trading horizon Chi Hua Fitness is expected to under-perform the Asmedia Technology. But the stock apears to be less risky and, when comparing its historical volatility, Chi Hua Fitness is 2.66 times less risky than Asmedia Technology. The stock trades about -0.32 of its potential returns per unit of risk. The Asmedia Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 203,500 in Asmedia Technology on October 28, 2024 and sell it today you would earn a total of 3,500 from holding Asmedia Technology or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chi Hua Fitness vs. Asmedia Technology
Performance |
| Timeline |
| Chi Hua Fitness |
| Asmedia Technology |
Chi Hua and Asmedia Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chi Hua and Asmedia Technology
The main advantage of trading using opposite Chi Hua and Asmedia Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chi Hua position performs unexpectedly, Asmedia Technology 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 Asmedia Technology will offset losses from the drop in Asmedia Technology's long position.| Chi Hua vs. Sunny Friend Environmental | Chi Hua vs. Cleanaway Co | Chi Hua vs. Charoen Pokphand Enterprise | Chi Hua vs. TTET Union Corp |
| Asmedia Technology vs. Alchip Technologies | Asmedia Technology vs. Aspeed Technology | Asmedia Technology vs. Silergy Corp | Asmedia Technology vs. Global Unichip Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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