Correlation Between Asmedia Technology and Kwong Fong
Can any of the company-specific risk be diversified away by investing in both Asmedia Technology and Kwong Fong 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 Asmedia Technology and Kwong Fong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asmedia Technology and Kwong Fong Industries, you can compare the effects of market volatilities on Asmedia Technology and Kwong Fong 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 Asmedia Technology with a short position of Kwong Fong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asmedia Technology and Kwong Fong.
Diversification Opportunities for Asmedia Technology and Kwong Fong
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Asmedia and Kwong is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Asmedia Technology and Kwong Fong Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kwong Fong Industries and Asmedia Technology 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 Asmedia Technology are associated (or correlated) with Kwong Fong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kwong Fong Industries has no effect on the direction of Asmedia Technology i.e., Asmedia Technology and Kwong Fong go up and down completely randomly.
Pair Corralation between Asmedia Technology and Kwong Fong
Assuming the 90 days trading horizon Asmedia Technology is expected to generate 1.87 times more return on investment than Kwong Fong. However, Asmedia Technology is 1.87 times more volatile than Kwong Fong Industries. It trades about -0.02 of its potential returns per unit of risk. Kwong Fong Industries is currently generating about -0.24 per unit of risk. If you would invest 163,000 in Asmedia Technology on September 4, 2024 and sell it today you would lose (3,500) from holding Asmedia Technology or give up 2.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asmedia Technology vs. Kwong Fong Industries
Performance |
| Timeline |
| Asmedia Technology |
| Kwong Fong Industries |
Asmedia Technology and Kwong Fong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asmedia Technology and Kwong Fong
The main advantage of trading using opposite Asmedia Technology and Kwong Fong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asmedia Technology position performs unexpectedly, Kwong Fong 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 Kwong Fong will offset losses from the drop in Kwong Fong's long position.| Asmedia Technology vs. Taiwan Semiconductor Manufacturing | Asmedia Technology vs. Yang Ming Marine | Asmedia Technology vs. ASE Industrial Holding | Asmedia Technology vs. AU Optronics |
| Kwong Fong vs. Ablerex Electronics Co | Kwong Fong vs. Fu Burg Industrial | Kwong Fong vs. Wah Hong Industrial | Kwong Fong vs. Excellence Optoelectronic |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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