Correlation Between General Interface and Asmedia Technology
Can any of the company-specific risk be diversified away by investing in both General Interface 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 General Interface and Asmedia Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Interface Solution and Asmedia Technology, you can compare the effects of market volatilities on General Interface 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 General Interface with a short position of Asmedia Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Interface and Asmedia Technology.
Diversification Opportunities for General Interface and Asmedia Technology
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between General and Asmedia is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding General Interface Solution and Asmedia Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asmedia Technology and General Interface 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 General Interface Solution 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 General Interface i.e., General Interface and Asmedia Technology go up and down completely randomly.
Pair Corralation between General Interface and Asmedia Technology
Assuming the 90 days trading horizon General Interface is expected to generate 1.2 times less return on investment than Asmedia Technology. In addition to that, General Interface is 1.37 times more volatile than Asmedia Technology. It trades about 0.13 of its total potential returns per unit of risk. Asmedia Technology is currently generating about 0.21 per unit of volatility. If you would invest 191,000 in Asmedia Technology on November 2, 2024 and sell it today you would earn a total of 16,000 from holding Asmedia Technology or generate 8.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Interface Solution vs. Asmedia Technology
Performance |
| Timeline |
| General Interface |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Asmedia Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
General Interface and Asmedia Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Interface and Asmedia Technology
The main advantage of trading using opposite General Interface and Asmedia Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Interface 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.The idea behind General Interface Solution and Asmedia Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |