Correlation Between Asmedia Technology and Alar Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Asmedia Technology and Alar Pharmaceuticals 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 Alar Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asmedia Technology and Alar Pharmaceuticals, you can compare the effects of market volatilities on Asmedia Technology and Alar Pharmaceuticals 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 Alar Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asmedia Technology and Alar Pharmaceuticals.
Diversification Opportunities for Asmedia Technology and Alar Pharmaceuticals
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Asmedia and Alar is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Asmedia Technology and Alar Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alar Pharmaceuticals 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 Alar Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alar Pharmaceuticals has no effect on the direction of Asmedia Technology i.e., Asmedia Technology and Alar Pharmaceuticals go up and down completely randomly.
Pair Corralation between Asmedia Technology and Alar Pharmaceuticals
Assuming the 90 days trading horizon Asmedia Technology is expected to generate 0.86 times more return on investment than Alar Pharmaceuticals. However, Asmedia Technology is 1.16 times less risky than Alar Pharmaceuticals. It trades about 0.03 of its potential returns per unit of risk. Alar Pharmaceuticals is currently generating about 0.0 per unit of risk. If you would invest 144,000 in Asmedia Technology on August 26, 2024 and sell it today you would earn a total of 20,000 from holding Asmedia Technology or generate 13.89% 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. Alar Pharmaceuticals
Performance |
| Timeline |
| Asmedia Technology |
| Alar Pharmaceuticals |
Asmedia Technology and Alar Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asmedia Technology and Alar Pharmaceuticals
The main advantage of trading using opposite Asmedia Technology and Alar Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asmedia Technology position performs unexpectedly, Alar Pharmaceuticals 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 Alar Pharmaceuticals will offset losses from the drop in Alar Pharmaceuticals' long position.| Asmedia Technology vs. Novatek Microelectronics Corp | Asmedia Technology vs. Quanta Computer | Asmedia Technology vs. United Microelectronics |
| Alar Pharmaceuticals vs. Arbor Technology | Alar Pharmaceuticals vs. Asmedia Technology | Alar Pharmaceuticals vs. Sitronix Technology Corp | Alar Pharmaceuticals vs. STL Technology Co |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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