Correlation Between Asmedia Technology and China Times
Can any of the company-specific risk be diversified away by investing in both Asmedia Technology and China Times 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 China Times into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asmedia Technology and China Times Publishing, you can compare the effects of market volatilities on Asmedia Technology and China Times 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 China Times. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asmedia Technology and China Times.
Diversification Opportunities for Asmedia Technology and China Times
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Asmedia and China is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Asmedia Technology and China Times Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Times Publishing 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 China Times. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Times Publishing has no effect on the direction of Asmedia Technology i.e., Asmedia Technology and China Times go up and down completely randomly.
Pair Corralation between Asmedia Technology and China Times
Assuming the 90 days trading horizon Asmedia Technology is expected to under-perform the China Times. But the stock apears to be less risky and, when comparing its historical volatility, Asmedia Technology is 1.25 times less risky than China Times. The stock trades about -0.02 of its potential returns per unit of risk. The China Times Publishing is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,945 in China Times Publishing on September 2, 2024 and sell it today you would lose (145.00) from holding China Times Publishing or give up 7.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Asmedia Technology vs. China Times Publishing
Performance |
| Timeline |
| Asmedia Technology |
| China Times Publishing |
Asmedia Technology and China Times Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asmedia Technology and China Times
The main advantage of trading using opposite Asmedia Technology and China Times positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asmedia Technology position performs unexpectedly, China Times 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 China Times will offset losses from the drop in China Times' long position.| Asmedia Technology vs. Alchip Technologies | Asmedia Technology vs. Aspeed Technology | Asmedia Technology vs. Silergy Corp | Asmedia Technology vs. Global Unichip Corp |
| China Times vs. Chinese Maritime Transport | China Times vs. Asia Metal Industries | China Times vs. China Metal Products | China Times vs. Tehmag Foods |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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