Correlation Between Asia Electronic and C Media
Can any of the company-specific risk be diversified away by investing in both Asia Electronic and C Media 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 Asia Electronic and C Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Electronic Material and C Media Electronics, you can compare the effects of market volatilities on Asia Electronic and C Media 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 Asia Electronic with a short position of C Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Electronic and C Media.
Diversification Opportunities for Asia Electronic and C Media
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Asia and 6237 is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Asia Electronic Material and C Media Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C Media Electronics and Asia Electronic 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 Asia Electronic Material are associated (or correlated) with C Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C Media Electronics has no effect on the direction of Asia Electronic i.e., Asia Electronic and C Media go up and down completely randomly.
Pair Corralation between Asia Electronic and C Media
Assuming the 90 days trading horizon Asia Electronic is expected to generate 30.45 times less return on investment than C Media. But when comparing it to its historical volatility, Asia Electronic Material is 2.4 times less risky than C Media. It trades about 0.02 of its potential returns per unit of risk. C Media Electronics is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 5,030 in C Media Electronics on October 12, 2024 and sell it today you would earn a total of 770.00 from holding C Media Electronics or generate 15.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Electronic Material vs. C Media Electronics
Performance |
| Timeline |
| Asia Electronic Material |
| C Media Electronics |
Asia Electronic and C Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Electronic and C Media
The main advantage of trading using opposite Asia Electronic and C Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Electronic position performs unexpectedly, C Media 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 C Media will offset losses from the drop in C Media's long position.| Asia Electronic vs. Shinkong Synthetic Fiber | Asia Electronic vs. C Media Electronics | Asia Electronic vs. Taiwan Speciality Chemicals | Asia Electronic vs. Mechema Chemicals Int |
| C Media vs. Taishin Financial Holding | C Media vs. Fulin Plastic Industry | C Media vs. Asia Electronic Material | C Media vs. Yonyu Plastics 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 CEOs Directory module to screen CEOs from public companies around the world.
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