Correlation Between Asmedia Technology and Alchip Technologies
Can any of the company-specific risk be diversified away by investing in both Asmedia Technology and Alchip Technologies 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 Alchip Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asmedia Technology and Alchip Technologies, you can compare the effects of market volatilities on Asmedia Technology and Alchip Technologies 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 Alchip Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asmedia Technology and Alchip Technologies.
Diversification Opportunities for Asmedia Technology and Alchip Technologies
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Asmedia and Alchip is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Asmedia Technology and Alchip Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alchip Technologies 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 Alchip Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alchip Technologies has no effect on the direction of Asmedia Technology i.e., Asmedia Technology and Alchip Technologies go up and down completely randomly.
Pair Corralation between Asmedia Technology and Alchip Technologies
Assuming the 90 days trading horizon Asmedia Technology is expected to generate 1.31 times less return on investment than Alchip Technologies. But when comparing it to its historical volatility, Asmedia Technology is 1.03 times less risky than Alchip Technologies. It trades about 0.05 of its potential returns per unit of risk. Alchip Technologies is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 126,000 in Alchip Technologies on August 29, 2024 and sell it today you would earn a total of 99,000 from holding Alchip Technologies or generate 78.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Asmedia Technology vs. Alchip Technologies
Performance |
| Timeline |
| Asmedia Technology |
| Alchip Technologies |
Asmedia Technology and Alchip Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asmedia Technology and Alchip Technologies
The main advantage of trading using opposite Asmedia Technology and Alchip Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asmedia Technology position performs unexpectedly, Alchip Technologies 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 Alchip Technologies will offset losses from the drop in Alchip Technologies' long position.| Asmedia Technology vs. Alchip Technologies | Asmedia Technology vs. Aspeed Technology | Asmedia Technology vs. Silergy Corp | Asmedia Technology vs. Global Unichip Corp |
| Alchip Technologies vs. Global Unichip Corp | Alchip Technologies vs. Asmedia Technology | Alchip Technologies vs. Unimicron Technology Corp | Alchip Technologies 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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