Correlation Between Asmedia Technology and Prime Electronics
Can any of the company-specific risk be diversified away by investing in both Asmedia Technology and Prime Electronics 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 Prime Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asmedia Technology and Prime Electronics Satellitics, you can compare the effects of market volatilities on Asmedia Technology and Prime Electronics 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 Prime Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asmedia Technology and Prime Electronics.
Diversification Opportunities for Asmedia Technology and Prime Electronics
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asmedia and Prime is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Asmedia Technology and Prime Electronics Satellitics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prime 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 Prime Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prime Electronics has no effect on the direction of Asmedia Technology i.e., Asmedia Technology and Prime Electronics go up and down completely randomly.
Pair Corralation between Asmedia Technology and Prime Electronics
Assuming the 90 days trading horizon Asmedia Technology is expected to generate 1.08 times more return on investment than Prime Electronics. However, Asmedia Technology is 1.08 times more volatile than Prime Electronics Satellitics. It trades about 0.0 of its potential returns per unit of risk. Prime Electronics Satellitics is currently generating about -0.21 per unit of risk. If you would invest 163,000 in Asmedia Technology on September 1, 2024 and sell it today you would lose (1,500) from holding Asmedia Technology or give up 0.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Asmedia Technology vs. Prime Electronics Satellitics
Performance |
| Timeline |
| Asmedia Technology |
| Prime Electronics |
Asmedia Technology and Prime Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asmedia Technology and Prime Electronics
The main advantage of trading using opposite Asmedia Technology and Prime Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asmedia Technology position performs unexpectedly, Prime Electronics 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 Prime Electronics will offset losses from the drop in Prime Electronics' long position.| Asmedia Technology vs. Alchip Technologies | Asmedia Technology vs. Aspeed Technology | Asmedia Technology vs. Silergy Corp | Asmedia Technology vs. Global Unichip Corp |
| Prime Electronics vs. V Tac Technology Co | Prime Electronics vs. Alchip Technologies | Prime Electronics vs. STL Technology Co | Prime Electronics vs. Asmedia Technology |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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