Correlation Between Sun Max and Asmedia Technology
Can any of the company-specific risk be diversified away by investing in both Sun Max 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 Sun Max and Asmedia Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Max Tech and Asmedia Technology, you can compare the effects of market volatilities on Sun Max 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 Sun Max with a short position of Asmedia Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Max and Asmedia Technology.
Diversification Opportunities for Sun Max and Asmedia Technology
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sun and Asmedia is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sun Max Tech and Asmedia Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asmedia Technology and Sun Max 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 Sun Max Tech 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 Sun Max i.e., Sun Max and Asmedia Technology go up and down completely randomly.
Pair Corralation between Sun Max and Asmedia Technology
Assuming the 90 days trading horizon Sun Max is expected to generate 10.07 times less return on investment than Asmedia Technology. But when comparing it to its historical volatility, Sun Max Tech is 1.66 times less risky than Asmedia Technology. It trades about 0.01 of its potential returns per unit of risk. Asmedia Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 123,500 in Asmedia Technology on October 28, 2024 and sell it today you would earn a total of 83,500 from holding Asmedia Technology or generate 67.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Max Tech vs. Asmedia Technology
Performance |
| Timeline |
| Sun Max Tech |
| Asmedia Technology |
Sun Max and Asmedia Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Max and Asmedia Technology
The main advantage of trading using opposite Sun Max and Asmedia Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Max 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.| Sun Max vs. ASRock Inc | Sun Max vs. Ko Ja Cayman | Sun Max vs. Chenbro Micom Co | Sun Max vs. Leadtek Research |
| 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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