Correlation Between Asmedia Technology and Asia Metal
Can any of the company-specific risk be diversified away by investing in both Asmedia Technology and Asia Metal 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 Asia Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asmedia Technology and Asia Metal Industries, you can compare the effects of market volatilities on Asmedia Technology and Asia Metal 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 Asia Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asmedia Technology and Asia Metal.
Diversification Opportunities for Asmedia Technology and Asia Metal
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Asmedia and Asia is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Asmedia Technology and Asia Metal Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Metal Industries 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 Asia Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Metal Industries has no effect on the direction of Asmedia Technology i.e., Asmedia Technology and Asia Metal go up and down completely randomly.
Pair Corralation between Asmedia Technology and Asia Metal
Assuming the 90 days trading horizon Asmedia Technology is expected to under-perform the Asia Metal. In addition to that, Asmedia Technology is 1.55 times more volatile than Asia Metal Industries. It trades about -0.05 of its total potential returns per unit of risk. Asia Metal Industries is currently generating about 0.12 per unit of volatility. If you would invest 5,750 in Asia Metal Industries on September 3, 2024 and sell it today you would earn a total of 3,050 from holding Asia Metal Industries or generate 53.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asmedia Technology vs. Asia Metal Industries
Performance |
| Timeline |
| Asmedia Technology |
| Asia Metal Industries |
Asmedia Technology and Asia Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asmedia Technology and Asia Metal
The main advantage of trading using opposite Asmedia Technology and Asia Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asmedia Technology position performs unexpectedly, Asia Metal 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 Asia Metal will offset losses from the drop in Asia Metal's long position.| Asmedia Technology vs. Taiwan Semiconductor Manufacturing | Asmedia Technology vs. Yang Ming Marine | Asmedia Technology vs. ASE Industrial Holding | Asmedia Technology vs. AU Optronics |
| Asia Metal vs. Highlight Tech | Asia Metal vs. WiseChip Semiconductor | Asia Metal vs. Novatek Microelectronics Corp | Asia Metal vs. Leader Electronics |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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