Correlation Between Asmedia Technology and Pili International
Can any of the company-specific risk be diversified away by investing in both Asmedia Technology and Pili International 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 Pili International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asmedia Technology and Pili International Multimedia, you can compare the effects of market volatilities on Asmedia Technology and Pili International 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 Pili International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asmedia Technology and Pili International.
Diversification Opportunities for Asmedia Technology and Pili International
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Asmedia and Pili is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Asmedia Technology and Pili International Multimedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pili International 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 Pili International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pili International has no effect on the direction of Asmedia Technology i.e., Asmedia Technology and Pili International go up and down completely randomly.
Pair Corralation between Asmedia Technology and Pili International
Assuming the 90 days trading horizon Asmedia Technology is expected to generate 2.02 times more return on investment than Pili International. However, Asmedia Technology is 2.02 times more volatile than Pili International Multimedia. It trades about 0.06 of its potential returns per unit of risk. Pili International Multimedia is currently generating about 0.0 per unit of risk. If you would invest 77,589 in Asmedia Technology on September 3, 2024 and sell it today you would earn a total of 83,911 from holding Asmedia Technology or generate 108.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Asmedia Technology vs. Pili International Multimedia
Performance |
| Timeline |
| Asmedia Technology |
| Pili International |
Asmedia Technology and Pili International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asmedia Technology and Pili International
The main advantage of trading using opposite Asmedia Technology and Pili International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asmedia Technology position performs unexpectedly, Pili International 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 Pili International will offset losses from the drop in Pili International'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 |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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