Correlation Between Asmedia Technology and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Asmedia Technology and Dow Jones 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 Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asmedia Technology and Dow Jones Industrial, you can compare the effects of market volatilities on Asmedia Technology and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asmedia Technology and Dow Jones.
Diversification Opportunities for Asmedia Technology and Dow Jones
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Asmedia and Dow is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Asmedia Technology and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Asmedia Technology i.e., Asmedia Technology and Dow Jones go up and down completely randomly.
Pair Corralation between Asmedia Technology and Dow Jones
Assuming the 90 days trading horizon Asmedia Technology is expected to generate 3.25 times more return on investment than Dow Jones. However, Asmedia Technology is 3.25 times more volatile than Dow Jones Industrial. It trades about 0.08 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.19 per unit of risk. If you would invest 200,000 in Asmedia Technology on October 25, 2024 and sell it today you would earn a total of 7,000 from holding Asmedia Technology or generate 3.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Asmedia Technology vs. Dow Jones Industrial
Performance |
| Timeline |
Asmedia Technology and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Asmedia Technology
Pair trading matchups for Asmedia Technology
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Asmedia Technology and Dow Jones
The main advantage of trading using opposite Asmedia Technology and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asmedia Technology position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Asmedia Technology vs. Alchip Technologies | Asmedia Technology vs. Aspeed Technology | Asmedia Technology vs. Silergy Corp | Asmedia Technology vs. Global Unichip Corp |
| Dow Jones vs. Xiabuxiabu Catering Management | Dow Jones vs. Neogen | Dow Jones vs. Orion Office Reit | Dow Jones vs. Bassett Furniture Industries |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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