Correlation Between Asmedia Technology and Avalue Technology
Can any of the company-specific risk be diversified away by investing in both Asmedia Technology and Avalue 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 Asmedia Technology and Avalue Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asmedia Technology and Avalue Technology, you can compare the effects of market volatilities on Asmedia Technology and Avalue 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 Asmedia Technology with a short position of Avalue Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asmedia Technology and Avalue Technology.
Diversification Opportunities for Asmedia Technology and Avalue Technology
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asmedia and Avalue is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Asmedia Technology and Avalue Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avalue Technology 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 Avalue Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avalue Technology has no effect on the direction of Asmedia Technology i.e., Asmedia Technology and Avalue Technology go up and down completely randomly.
Pair Corralation between Asmedia Technology and Avalue Technology
Assuming the 90 days trading horizon Asmedia Technology is expected to generate 1.81 times more return on investment than Avalue Technology. However, Asmedia Technology is 1.81 times more volatile than Avalue Technology. It trades about 0.02 of its potential returns per unit of risk. Avalue Technology is currently generating about -0.07 per unit of risk. If you would invest 159,500 in Asmedia Technology on August 30, 2024 and sell it today you would earn a total of 500.00 from holding Asmedia Technology or generate 0.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Asmedia Technology vs. Avalue Technology
Performance |
| Timeline |
| Asmedia Technology |
| Avalue Technology |
Asmedia Technology and Avalue Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asmedia Technology and Avalue Technology
The main advantage of trading using opposite Asmedia Technology and Avalue Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asmedia Technology position performs unexpectedly, Avalue 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 Avalue Technology will offset losses from the drop in Avalue Technology's long position.| Asmedia Technology vs. Alchip Technologies | Asmedia Technology vs. Aspeed Technology | Asmedia Technology vs. Silergy Corp | Asmedia Technology vs. Global Unichip Corp |
| Avalue Technology vs. International CSRC Investment | Avalue Technology vs. Farglory FTZ Investment | Avalue Technology vs. ReaLy Development Construction | Avalue Technology vs. Chung Hsin Electric Machinery |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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