Correlation Between Silicon Power and Asmedia Technology
Can any of the company-specific risk be diversified away by investing in both Silicon Power 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 Silicon Power and Asmedia Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silicon Power Computer and Asmedia Technology, you can compare the effects of market volatilities on Silicon Power 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 Silicon Power with a short position of Asmedia Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silicon Power and Asmedia Technology.
Diversification Opportunities for Silicon Power and Asmedia Technology
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Silicon and Asmedia is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Silicon Power Computer and Asmedia Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asmedia Technology and Silicon Power 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 Silicon Power Computer 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 Silicon Power i.e., Silicon Power and Asmedia Technology go up and down completely randomly.
Pair Corralation between Silicon Power and Asmedia Technology
Assuming the 90 days trading horizon Silicon Power Computer is expected to generate 0.72 times more return on investment than Asmedia Technology. However, Silicon Power Computer is 1.39 times less risky than Asmedia Technology. It trades about 0.17 of its potential returns per unit of risk. Asmedia Technology is currently generating about -0.02 per unit of risk. If you would invest 3,080 in Silicon Power Computer on September 4, 2024 and sell it today you would earn a total of 215.00 from holding Silicon Power Computer or generate 6.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silicon Power Computer vs. Asmedia Technology
Performance |
| Timeline |
| Silicon Power Computer |
| Asmedia Technology |
Silicon Power and Asmedia Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silicon Power and Asmedia Technology
The main advantage of trading using opposite Silicon Power and Asmedia Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silicon Power 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.| Silicon Power vs. Quanta Computer | Silicon Power vs. Elitegroup Computer Systems | Silicon Power vs. WiseChip Semiconductor | Silicon Power vs. Novatek Microelectronics Corp |
| Asmedia Technology vs. Taiwan Semiconductor Manufacturing | Asmedia Technology vs. Yang Ming Marine | Asmedia Technology vs. AU Optronics | Asmedia Technology vs. Innolux 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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