Correlation Between Asmedia Technology and Syntek Semiconductor
Can any of the company-specific risk be diversified away by investing in both Asmedia Technology and Syntek Semiconductor 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 Syntek Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asmedia Technology and Syntek Semiconductor Co, you can compare the effects of market volatilities on Asmedia Technology and Syntek Semiconductor 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 Syntek Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asmedia Technology and Syntek Semiconductor.
Diversification Opportunities for Asmedia Technology and Syntek Semiconductor
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Asmedia and Syntek is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Asmedia Technology and Syntek Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Syntek Semiconductor 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 Syntek Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Syntek Semiconductor has no effect on the direction of Asmedia Technology i.e., Asmedia Technology and Syntek Semiconductor go up and down completely randomly.
Pair Corralation between Asmedia Technology and Syntek Semiconductor
Assuming the 90 days trading horizon Asmedia Technology is expected to generate 0.6 times more return on investment than Syntek Semiconductor. However, Asmedia Technology is 1.67 times less risky than Syntek Semiconductor. It trades about 0.21 of its potential returns per unit of risk. Syntek Semiconductor Co is currently generating about 0.07 per unit of risk. If you would invest 191,000 in Asmedia Technology on November 3, 2024 and sell it today you would earn a total of 16,000 from holding Asmedia Technology or generate 8.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asmedia Technology vs. Syntek Semiconductor Co
Performance |
| Timeline |
| Asmedia Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Syntek Semiconductor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Asmedia Technology and Syntek Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asmedia Technology and Syntek Semiconductor
The main advantage of trading using opposite Asmedia Technology and Syntek Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asmedia Technology position performs unexpectedly, Syntek Semiconductor 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 Syntek Semiconductor will offset losses from the drop in Syntek Semiconductor's long position.The idea behind Asmedia Technology and Syntek Semiconductor Co 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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