Correlation Between Asmedia Technology and Aspeed Technology
Can any of the company-specific risk be diversified away by investing in both Asmedia Technology and Aspeed 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 Aspeed 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 Aspeed Technology, you can compare the effects of market volatilities on Asmedia Technology and Aspeed 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 Aspeed Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asmedia Technology and Aspeed Technology.
Diversification Opportunities for Asmedia Technology and Aspeed Technology
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Asmedia and Aspeed is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Asmedia Technology and Aspeed Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspeed 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 Aspeed Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspeed Technology has no effect on the direction of Asmedia Technology i.e., Asmedia Technology and Aspeed Technology go up and down completely randomly.
Pair Corralation between Asmedia Technology and Aspeed Technology
Assuming the 90 days trading horizon Asmedia Technology is expected to generate 0.7 times more return on investment than Aspeed Technology. However, Asmedia Technology is 1.43 times less risky than Aspeed Technology. It trades about 0.09 of its potential returns per unit of risk. Aspeed Technology is currently generating about 0.02 per unit of risk. If you would invest 200,000 in Asmedia Technology on October 23, 2024 and sell it today you would earn a total of 8,500 from holding Asmedia Technology or generate 4.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Asmedia Technology vs. Aspeed Technology
Performance |
| Timeline |
| Asmedia Technology |
| Aspeed Technology |
Asmedia Technology and Aspeed Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asmedia Technology and Aspeed Technology
The main advantage of trading using opposite Asmedia Technology and Aspeed Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asmedia Technology position performs unexpectedly, Aspeed 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 Aspeed Technology will offset losses from the drop in Aspeed 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 |
| Aspeed Technology vs. Asmedia Technology | Aspeed Technology vs. Silergy Corp | Aspeed Technology vs. Parade Technologies | Aspeed Technology vs. Wiwynn 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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