Correlation Between Century Wind and Asmedia Technology
Can any of the company-specific risk be diversified away by investing in both Century Wind 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 Century Wind and Asmedia Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Wind Power and Asmedia Technology, you can compare the effects of market volatilities on Century Wind 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 Century Wind with a short position of Asmedia Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Wind and Asmedia Technology.
Diversification Opportunities for Century Wind and Asmedia Technology
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Century and Asmedia is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Century Wind Power and Asmedia Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asmedia Technology and Century Wind 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 Century Wind Power 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 Century Wind i.e., Century Wind and Asmedia Technology go up and down completely randomly.
Pair Corralation between Century Wind and Asmedia Technology
Assuming the 90 days trading horizon Century Wind is expected to generate 1.16 times less return on investment than Asmedia Technology. But when comparing it to its historical volatility, Century Wind Power is 1.35 times less risky than Asmedia Technology. It trades about 0.09 of its potential returns per unit of risk. Asmedia Technology is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 73,866 in Asmedia Technology on September 26, 2024 and sell it today you would earn a total of 126,134 from holding Asmedia Technology or generate 170.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Wind Power vs. Asmedia Technology
Performance |
| Timeline |
| Century Wind Power |
| Asmedia Technology |
Century Wind and Asmedia Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Wind and Asmedia Technology
The main advantage of trading using opposite Century Wind and Asmedia Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Wind 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.| Century Wind vs. Ruentex Development Co | Century Wind vs. United Integrated Services | Century Wind vs. CTCI Corp | Century Wind vs. Continental Holdings Corp |
| Asmedia Technology vs. Century Wind Power | Asmedia Technology vs. Green World Fintech | Asmedia Technology vs. Ingentec | Asmedia Technology vs. Chaheng Precision Co |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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