Correlation Between Asmedia Technology and Maxigen Biotech
Can any of the company-specific risk be diversified away by investing in both Asmedia Technology and Maxigen Biotech 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 Maxigen Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asmedia Technology and Maxigen Biotech, you can compare the effects of market volatilities on Asmedia Technology and Maxigen Biotech 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 Maxigen Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asmedia Technology and Maxigen Biotech.
Diversification Opportunities for Asmedia Technology and Maxigen Biotech
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Asmedia and Maxigen is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Asmedia Technology and Maxigen Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maxigen Biotech 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 Maxigen Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maxigen Biotech has no effect on the direction of Asmedia Technology i.e., Asmedia Technology and Maxigen Biotech go up and down completely randomly.
Pair Corralation between Asmedia Technology and Maxigen Biotech
Assuming the 90 days trading horizon Asmedia Technology is expected to under-perform the Maxigen Biotech. In addition to that, Asmedia Technology is 1.83 times more volatile than Maxigen Biotech. It trades about -0.03 of its total potential returns per unit of risk. Maxigen Biotech is currently generating about 0.01 per unit of volatility. If you would invest 4,490 in Maxigen Biotech on September 3, 2024 and sell it today you would lose (30.00) from holding Maxigen Biotech or give up 0.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asmedia Technology vs. Maxigen Biotech
Performance |
| Timeline |
| Asmedia Technology |
| Maxigen Biotech |
Asmedia Technology and Maxigen Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asmedia Technology and Maxigen Biotech
The main advantage of trading using opposite Asmedia Technology and Maxigen Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asmedia Technology position performs unexpectedly, Maxigen Biotech 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 Maxigen Biotech will offset losses from the drop in Maxigen Biotech'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 |
| Maxigen Biotech vs. Phytohealth Corp | Maxigen Biotech vs. Yung Zip Chemical | Maxigen Biotech vs. WiseChip Semiconductor | Maxigen Biotech vs. Novatek Microelectronics 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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