Correlation Between Genovate Biotechnology and Asmedia Technology
Can any of the company-specific risk be diversified away by investing in both Genovate Biotechnology 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 Genovate Biotechnology and Asmedia Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genovate Biotechnology Co and Asmedia Technology, you can compare the effects of market volatilities on Genovate Biotechnology 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 Genovate Biotechnology with a short position of Asmedia Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genovate Biotechnology and Asmedia Technology.
Diversification Opportunities for Genovate Biotechnology and Asmedia Technology
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Genovate and Asmedia is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Genovate Biotechnology Co and Asmedia Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asmedia Technology and Genovate Biotechnology 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 Genovate Biotechnology Co 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 Genovate Biotechnology i.e., Genovate Biotechnology and Asmedia Technology go up and down completely randomly.
Pair Corralation between Genovate Biotechnology and Asmedia Technology
Assuming the 90 days trading horizon Genovate Biotechnology Co is expected to under-perform the Asmedia Technology. But the stock apears to be less risky and, when comparing its historical volatility, Genovate Biotechnology Co is 5.09 times less risky than Asmedia Technology. The stock trades about -0.24 of its potential returns per unit of risk. The Asmedia Technology is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 168,000 in Asmedia Technology on August 26, 2024 and sell it today you would lose (4,000) from holding Asmedia Technology or give up 2.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genovate Biotechnology Co vs. Asmedia Technology
Performance |
| Timeline |
| Genovate Biotechnology |
| Asmedia Technology |
Genovate Biotechnology and Asmedia Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genovate Biotechnology and Asmedia Technology
The main advantage of trading using opposite Genovate Biotechnology and Asmedia Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genovate Biotechnology 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.| Genovate Biotechnology vs. OBI Pharma | Genovate Biotechnology vs. Tanvex BioPharma | Genovate Biotechnology vs. Adimmune Corp |
| Asmedia Technology vs. Novatek Microelectronics Corp | Asmedia Technology vs. Quanta Computer | Asmedia Technology vs. United Microelectronics |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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