Correlation Between Asmedia Technology and Long Bon
Can any of the company-specific risk be diversified away by investing in both Asmedia Technology and Long Bon 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 Long Bon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asmedia Technology and Long Bon International, you can compare the effects of market volatilities on Asmedia Technology and Long Bon 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 Long Bon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asmedia Technology and Long Bon.
Diversification Opportunities for Asmedia Technology and Long Bon
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asmedia and Long is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Asmedia Technology and Long Bon International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Long Bon International 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 Long Bon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Long Bon International has no effect on the direction of Asmedia Technology i.e., Asmedia Technology and Long Bon go up and down completely randomly.
Pair Corralation between Asmedia Technology and Long Bon
Assuming the 90 days trading horizon Asmedia Technology is expected to generate 3.53 times more return on investment than Long Bon. However, Asmedia Technology is 3.53 times more volatile than Long Bon International. It trades about 0.28 of its potential returns per unit of risk. Long Bon International is currently generating about -0.34 per unit of risk. If you would invest 164,000 in Asmedia Technology on September 23, 2024 and sell it today you would earn a total of 36,000 from holding Asmedia Technology or generate 21.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asmedia Technology vs. Long Bon International
Performance |
| Timeline |
| Asmedia Technology |
| Long Bon International |
Asmedia Technology and Long Bon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asmedia Technology and Long Bon
The main advantage of trading using opposite Asmedia Technology and Long Bon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asmedia Technology position performs unexpectedly, Long Bon 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 Long Bon will offset losses from the drop in Long Bon's long position.| Asmedia Technology vs. Alchip Technologies | Asmedia Technology vs. Aspeed Technology | Asmedia Technology vs. Silergy Corp | Asmedia Technology vs. Global Unichip Corp |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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