Correlation Between Mechema Chemicals and Asmedia Technology
Can any of the company-specific risk be diversified away by investing in both Mechema Chemicals 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 Mechema Chemicals and Asmedia Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mechema Chemicals Int and Asmedia Technology, you can compare the effects of market volatilities on Mechema Chemicals 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 Mechema Chemicals with a short position of Asmedia Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mechema Chemicals and Asmedia Technology.
Diversification Opportunities for Mechema Chemicals and Asmedia Technology
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mechema and Asmedia is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Mechema Chemicals Int and Asmedia Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asmedia Technology and Mechema Chemicals 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 Mechema Chemicals Int 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 Mechema Chemicals i.e., Mechema Chemicals and Asmedia Technology go up and down completely randomly.
Pair Corralation between Mechema Chemicals and Asmedia Technology
Assuming the 90 days trading horizon Mechema Chemicals Int is expected to under-perform the Asmedia Technology. But the stock apears to be less risky and, when comparing its historical volatility, Mechema Chemicals Int is 1.84 times less risky than Asmedia Technology. The stock trades about -0.03 of its potential returns per unit of risk. The Asmedia Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 123,500 in Asmedia Technology on October 28, 2024 and sell it today you would earn a total of 83,500 from holding Asmedia Technology or generate 67.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mechema Chemicals Int vs. Asmedia Technology
Performance |
| Timeline |
| Mechema Chemicals Int |
| Asmedia Technology |
Mechema Chemicals and Asmedia Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mechema Chemicals and Asmedia Technology
The main advantage of trading using opposite Mechema Chemicals and Asmedia Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mechema Chemicals 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.| Mechema Chemicals vs. Coremax Corp | Mechema Chemicals vs. Taiwan Hopax Chemsistry | Mechema Chemicals vs. Delta Electronics | Mechema Chemicals vs. China Steel Chemical |
| 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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