Correlation Between HIM International and Asmedia Technology
Can any of the company-specific risk be diversified away by investing in both HIM International 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 HIM International and Asmedia Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HIM International Music and Asmedia Technology, you can compare the effects of market volatilities on HIM International 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 HIM International with a short position of Asmedia Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of HIM International and Asmedia Technology.
Diversification Opportunities for HIM International and Asmedia Technology
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HIM and Asmedia is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding HIM International Music and Asmedia Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asmedia Technology and HIM International 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 HIM International Music 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 HIM International i.e., HIM International and Asmedia Technology go up and down completely randomly.
Pair Corralation between HIM International and Asmedia Technology
Assuming the 90 days trading horizon HIM International is expected to generate 1.94 times less return on investment than Asmedia Technology. But when comparing it to its historical volatility, HIM International Music is 1.87 times less risky than Asmedia Technology. It trades about 0.06 of its potential returns per unit of risk. Asmedia Technology is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 69,849 in Asmedia Technology on August 30, 2024 and sell it today you would earn a total of 90,151 from holding Asmedia Technology or generate 129.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
HIM International Music vs. Asmedia Technology
Performance |
| Timeline |
| HIM International Music |
| Asmedia Technology |
HIM International and Asmedia Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HIM International and Asmedia Technology
The main advantage of trading using opposite HIM International and Asmedia Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HIM International 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.| HIM International vs. Leatec Fine Ceramics | HIM International vs. Information Technology Total | HIM International vs. Kinko Optical Co | HIM International vs. E Lead Electronic Co |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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