Correlation Between Asmedia Technology and New Era
Can any of the company-specific risk be diversified away by investing in both Asmedia Technology and New Era 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 New Era into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asmedia Technology and New Era Electronics, you can compare the effects of market volatilities on Asmedia Technology and New Era 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 New Era. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asmedia Technology and New Era.
Diversification Opportunities for Asmedia Technology and New Era
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asmedia and New is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Asmedia Technology and New Era Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Era Electronics 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 New Era. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Era Electronics has no effect on the direction of Asmedia Technology i.e., Asmedia Technology and New Era go up and down completely randomly.
Pair Corralation between Asmedia Technology and New Era
Assuming the 90 days trading horizon Asmedia Technology is expected to generate 0.89 times more return on investment than New Era. However, Asmedia Technology is 1.12 times less risky than New Era. It trades about 0.08 of its potential returns per unit of risk. New Era Electronics is currently generating about -0.22 per unit of risk. If you would invest 200,000 in Asmedia Technology on October 25, 2024 and sell it today you would earn a total of 7,000 from holding Asmedia Technology or generate 3.5% 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. New Era Electronics
Performance |
| Timeline |
| Asmedia Technology |
| New Era Electronics |
Asmedia Technology and New Era Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asmedia Technology and New Era
The main advantage of trading using opposite Asmedia Technology and New Era positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asmedia Technology position performs unexpectedly, New Era 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 New Era will offset losses from the drop in New Era's long position.| Asmedia Technology vs. Alchip Technologies | Asmedia Technology vs. Aspeed Technology | Asmedia Technology vs. Silergy Corp | Asmedia Technology vs. Global Unichip Corp |
| New Era vs. SS Healthcare Holding | New Era vs. Xxentria Technology Materials | New Era vs. Onyx Healthcare | New Era vs. Fulin Plastic Industry |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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