Correlation Between Asmedia Technology and Song Ho
Can any of the company-specific risk be diversified away by investing in both Asmedia Technology and Song Ho 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 Song Ho into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asmedia Technology and Song Ho Industrial, you can compare the effects of market volatilities on Asmedia Technology and Song Ho 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 Song Ho. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asmedia Technology and Song Ho.
Diversification Opportunities for Asmedia Technology and Song Ho
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Asmedia and Song is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Asmedia Technology and Song Ho Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Song Ho Industrial 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 Song Ho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Song Ho Industrial has no effect on the direction of Asmedia Technology i.e., Asmedia Technology and Song Ho go up and down completely randomly.
Pair Corralation between Asmedia Technology and Song Ho
Assuming the 90 days trading horizon Asmedia Technology is expected to generate 4.38 times more return on investment than Song Ho. However, Asmedia Technology is 4.38 times more volatile than Song Ho Industrial. It trades about 0.07 of its potential returns per unit of risk. Song Ho Industrial is currently generating about 0.0 per unit of risk. If you would invest 69,849 in Asmedia Technology on August 30, 2024 and sell it today you would earn a total of 90,151 from holding Asmedia Technology or generate 129.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Asmedia Technology vs. Song Ho Industrial
Performance |
| Timeline |
| Asmedia Technology |
| Song Ho Industrial |
Asmedia Technology and Song Ho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asmedia Technology and Song Ho
The main advantage of trading using opposite Asmedia Technology and Song Ho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asmedia Technology position performs unexpectedly, Song Ho 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 Song Ho will offset losses from the drop in Song Ho's long position.| Asmedia Technology vs. Alchip Technologies | Asmedia Technology vs. Aspeed Technology | Asmedia Technology vs. Silergy Corp | Asmedia Technology vs. Global Unichip Corp |
| Song Ho vs. China Steel Corp | Song Ho vs. Chung Hung Steel | Song Ho vs. Tung Ho Steel | Song Ho vs. Feng Hsin Steel |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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