Correlation Between C Media and Asia Electronic
Can any of the company-specific risk be diversified away by investing in both C Media and Asia Electronic 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 C Media and Asia Electronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between C Media Electronics and Asia Electronic Material, you can compare the effects of market volatilities on C Media and Asia Electronic 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 C Media with a short position of Asia Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of C Media and Asia Electronic.
Diversification Opportunities for C Media and Asia Electronic
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 6237 and Asia is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding C Media Electronics and Asia Electronic Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Electronic Material and C Media 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 C Media Electronics are associated (or correlated) with Asia Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Electronic Material has no effect on the direction of C Media i.e., C Media and Asia Electronic go up and down completely randomly.
Pair Corralation between C Media and Asia Electronic
Assuming the 90 days trading horizon C Media Electronics is expected to generate 2.4 times more return on investment than Asia Electronic. However, C Media is 2.4 times more volatile than Asia Electronic Material. It trades about 0.19 of its potential returns per unit of risk. Asia Electronic Material is currently generating about 0.02 per unit of risk. If you would invest 5,030 in C Media Electronics on October 12, 2024 and sell it today you would earn a total of 770.00 from holding C Media Electronics or generate 15.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
C Media Electronics vs. Asia Electronic Material
Performance |
| Timeline |
| C Media Electronics |
| Asia Electronic Material |
C Media and Asia Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with C Media and Asia Electronic
The main advantage of trading using opposite C Media and Asia Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C Media position performs unexpectedly, Asia Electronic 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 Asia Electronic will offset losses from the drop in Asia Electronic's long position.| C Media vs. Taishin Financial Holding | C Media vs. Fulin Plastic Industry | C Media vs. Asia Electronic Material | C Media vs. Yonyu Plastics Co |
| Asia Electronic vs. Shinkong Synthetic Fiber | Asia Electronic vs. C Media Electronics | Asia Electronic vs. Taiwan Speciality Chemicals | Asia Electronic vs. Mechema Chemicals Int |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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