Correlation Between United Radiant and Asmedia Technology
Can any of the company-specific risk be diversified away by investing in both United Radiant and Asmedia Technology 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 United Radiant and Asmedia Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Radiant Technology and Asmedia Technology, you can compare the effects of market volatilities on United Radiant and Asmedia Technology 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 United Radiant with a short position of Asmedia Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Radiant and Asmedia Technology.
Diversification Opportunities for United Radiant and Asmedia Technology
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and Asmedia is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding United Radiant Technology and Asmedia Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asmedia Technology and United Radiant 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 United Radiant Technology are associated (or correlated) with Asmedia Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asmedia Technology has no effect on the direction of United Radiant i.e., United Radiant and Asmedia Technology go up and down completely randomly.
Pair Corralation between United Radiant and Asmedia Technology
Assuming the 90 days trading horizon United Radiant Technology is expected to under-perform the Asmedia Technology. But the stock apears to be less risky and, when comparing its historical volatility, United Radiant Technology is 1.49 times less risky than Asmedia Technology. The stock trades about -0.08 of its potential returns per unit of risk. The Asmedia Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 203,500 in Asmedia Technology on October 28, 2024 and sell it today you would earn a total of 3,500 from holding Asmedia Technology or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Radiant Technology vs. Asmedia Technology
Performance |
| Timeline |
| United Radiant Technology |
| Asmedia Technology |
United Radiant and Asmedia Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Radiant and Asmedia Technology
The main advantage of trading using opposite United Radiant and Asmedia Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Radiant position performs unexpectedly, Asmedia Technology 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 Asmedia Technology will offset losses from the drop in Asmedia Technology's long position.| United Radiant vs. Advantech Co | United Radiant vs. IEI Integration Corp | United Radiant vs. Flytech Technology Co | United Radiant vs. Ennoconn Corp |
| Asmedia Technology vs. Alchip Technologies | Asmedia Technology vs. Aspeed Technology | Asmedia Technology vs. Silergy Corp | Asmedia Technology vs. Global Unichip Corp |
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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