Correlation Between Asmedia Technology and Great Computer
Can any of the company-specific risk be diversified away by investing in both Asmedia Technology and Great Computer 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 Great Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asmedia Technology and Great Computer, you can compare the effects of market volatilities on Asmedia Technology and Great Computer 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 Great Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asmedia Technology and Great Computer.
Diversification Opportunities for Asmedia Technology and Great Computer
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Asmedia and Great is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Asmedia Technology and Great Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Computer 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 Great Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Computer has no effect on the direction of Asmedia Technology i.e., Asmedia Technology and Great Computer go up and down completely randomly.
Pair Corralation between Asmedia Technology and Great Computer
Assuming the 90 days trading horizon Asmedia Technology is expected to generate 0.62 times more return on investment than Great Computer. However, Asmedia Technology is 1.61 times less risky than Great Computer. It trades about 0.11 of its potential returns per unit of risk. Great Computer is currently generating about -0.19 per unit of risk. If you would invest 197,500 in Asmedia Technology on October 29, 2024 and sell it today you would earn a total of 9,500 from holding Asmedia Technology or generate 4.81% 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. Great Computer
Performance |
| Timeline |
| Asmedia Technology |
| Great Computer |
Asmedia Technology and Great Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asmedia Technology and Great Computer
The main advantage of trading using opposite Asmedia Technology and Great Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asmedia Technology position performs unexpectedly, Great Computer 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 Great Computer will offset losses from the drop in Great Computer's long position.| Asmedia Technology vs. Alchip Technologies | Asmedia Technology vs. Aspeed Technology | Asmedia Technology vs. Silergy Corp | Asmedia Technology vs. Global Unichip Corp |
| Great Computer vs. Oceanic Beverages Co | Great Computer vs. Ruentex Engineering Construction | Great Computer vs. Chumpower Machinery Corp | Great Computer vs. Cathay Chemical Works |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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