Correlation Between Dynamic Medical and Asia Electronic
Can any of the company-specific risk be diversified away by investing in both Dynamic Medical and Asia Electronic 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 Dynamic Medical and Asia Electronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynamic Medical Technologies and Asia Electronic Material, you can compare the effects of market volatilities on Dynamic Medical and Asia Electronic 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 Dynamic Medical with a short position of Asia Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynamic Medical and Asia Electronic.
Diversification Opportunities for Dynamic Medical and Asia Electronic
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dynamic and Asia is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Dynamic Medical Technologies and Asia Electronic Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Electronic Material and Dynamic Medical 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 Dynamic Medical Technologies are associated (or correlated) with Asia Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Electronic Material has no effect on the direction of Dynamic Medical i.e., Dynamic Medical and Asia Electronic go up and down completely randomly.
Pair Corralation between Dynamic Medical and Asia Electronic
Assuming the 90 days trading horizon Dynamic Medical Technologies is expected to generate 1.97 times more return on investment than Asia Electronic. However, Dynamic Medical is 1.97 times more volatile than Asia Electronic Material. It trades about 0.08 of its potential returns per unit of risk. Asia Electronic Material is currently generating about 0.04 per unit of risk. If you would invest 9,020 in Dynamic Medical Technologies on September 5, 2024 and sell it today you would earn a total of 280.00 from holding Dynamic Medical Technologies or generate 3.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dynamic Medical Technologies vs. Asia Electronic Material
Performance |
| Timeline |
| Dynamic Medical Tech |
| Asia Electronic Material |
Dynamic Medical and Asia Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynamic Medical and Asia Electronic
The main advantage of trading using opposite Dynamic Medical and Asia Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynamic Medical position performs unexpectedly, Asia Electronic 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 Asia Electronic will offset losses from the drop in Asia Electronic's long position.| Dynamic Medical vs. Chinese Maritime Transport | Dynamic Medical vs. Unique Optical Industrial | Dynamic Medical vs. Hi Lai Foods Co | Dynamic Medical vs. Shuang Bang Industrial |
| Asia Electronic vs. International Games System | Asia Electronic vs. China Metal Products | Asia Electronic vs. Dynamic Medical Technologies | Asia Electronic vs. Chernan Metal Industrial |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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