Correlation Between Asmedia Technology and Cipherlab
Can any of the company-specific risk be diversified away by investing in both Asmedia Technology and Cipherlab 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 Cipherlab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asmedia Technology and Cipherlab Co, you can compare the effects of market volatilities on Asmedia Technology and Cipherlab 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 Cipherlab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asmedia Technology and Cipherlab.
Diversification Opportunities for Asmedia Technology and Cipherlab
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Asmedia and Cipherlab is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Asmedia Technology and Cipherlab Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cipherlab 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 Cipherlab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cipherlab has no effect on the direction of Asmedia Technology i.e., Asmedia Technology and Cipherlab go up and down completely randomly.
Pair Corralation between Asmedia Technology and Cipherlab
Assuming the 90 days trading horizon Asmedia Technology is expected to generate 1.96 times more return on investment than Cipherlab. However, Asmedia Technology is 1.96 times more volatile than Cipherlab Co. It trades about 0.24 of its potential returns per unit of risk. Cipherlab Co is currently generating about -0.12 per unit of risk. If you would invest 168,500 in Asmedia Technology on September 26, 2024 and sell it today you would earn a total of 31,500 from holding Asmedia Technology or generate 18.69% 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. Cipherlab Co
Performance |
| Timeline |
| Asmedia Technology |
| Cipherlab |
Asmedia Technology and Cipherlab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asmedia Technology and Cipherlab
The main advantage of trading using opposite Asmedia Technology and Cipherlab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asmedia Technology position performs unexpectedly, Cipherlab 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 Cipherlab will offset losses from the drop in Cipherlab's long position.| Asmedia Technology vs. Century Wind Power | Asmedia Technology vs. Green World Fintech | Asmedia Technology vs. Ingentec | Asmedia Technology vs. Chaheng Precision Co |
| Cipherlab vs. GeoVision | Cipherlab vs. Flytech Technology Co | Cipherlab vs. Quanta Storage | Cipherlab vs. Coretronic |
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 Stocks Directory module to find actively traded stocks across global markets.
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