Correlation Between Asmedia Technology and Macroblock
Can any of the company-specific risk be diversified away by investing in both Asmedia Technology and Macroblock 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 Macroblock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asmedia Technology and Macroblock, you can compare the effects of market volatilities on Asmedia Technology and Macroblock 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 Macroblock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asmedia Technology and Macroblock.
Diversification Opportunities for Asmedia Technology and Macroblock
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asmedia and Macroblock is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Asmedia Technology and Macroblock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macroblock 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 Macroblock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macroblock has no effect on the direction of Asmedia Technology i.e., Asmedia Technology and Macroblock go up and down completely randomly.
Pair Corralation between Asmedia Technology and Macroblock
Assuming the 90 days trading horizon Asmedia Technology is expected to generate 1.4 times less return on investment than Macroblock. But when comparing it to its historical volatility, Asmedia Technology is 1.35 times less risky than Macroblock. It trades about 0.21 of its potential returns per unit of risk. Macroblock is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 6,760 in Macroblock on November 3, 2024 and sell it today you would earn a total of 790.00 from holding Macroblock or generate 11.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asmedia Technology vs. Macroblock
Performance |
| Timeline |
| Asmedia Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Macroblock |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Asmedia Technology and Macroblock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asmedia Technology and Macroblock
The main advantage of trading using opposite Asmedia Technology and Macroblock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asmedia Technology position performs unexpectedly, Macroblock 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 Macroblock will offset losses from the drop in Macroblock's long position.The idea behind Asmedia Technology and Macroblock 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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