Correlation Between Asmedia Technology and SciVision Biotech
Can any of the company-specific risk be diversified away by investing in both Asmedia Technology and SciVision 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 SciVision 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 SciVision Biotech, you can compare the effects of market volatilities on Asmedia Technology and SciVision 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 SciVision Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asmedia Technology and SciVision Biotech.
Diversification Opportunities for Asmedia Technology and SciVision Biotech
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Asmedia and SciVision is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Asmedia Technology and SciVision Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SciVision 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 SciVision Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SciVision Biotech has no effect on the direction of Asmedia Technology i.e., Asmedia Technology and SciVision Biotech go up and down completely randomly.
Pair Corralation between Asmedia Technology and SciVision Biotech
Assuming the 90 days trading horizon Asmedia Technology is expected to under-perform the SciVision Biotech. But the stock apears to be less risky and, when comparing its historical volatility, Asmedia Technology is 1.13 times less risky than SciVision Biotech. The stock trades about 0.0 of its potential returns per unit of risk. The SciVision Biotech is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 11,250 in SciVision Biotech on November 7, 2024 and sell it today you would earn a total of 850.00 from holding SciVision Biotech or generate 7.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asmedia Technology vs. SciVision Biotech
Performance |
| Timeline |
| Asmedia Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| SciVision Biotech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Asmedia Technology and SciVision Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asmedia Technology and SciVision Biotech
The main advantage of trading using opposite Asmedia Technology and SciVision Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asmedia Technology position performs unexpectedly, SciVision 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 SciVision Biotech will offset losses from the drop in SciVision Biotech's long position.The idea behind Asmedia Technology and SciVision Biotech pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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