Correlation Between AiMedia Technologies and Skycity Entertainment
Can any of the company-specific risk be diversified away by investing in both AiMedia Technologies and Skycity Entertainment 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 AiMedia Technologies and Skycity Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AiMedia Technologies and Skycity Entertainment Group, you can compare the effects of market volatilities on AiMedia Technologies and Skycity Entertainment 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 AiMedia Technologies with a short position of Skycity Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of AiMedia Technologies and Skycity Entertainment.
Diversification Opportunities for AiMedia Technologies and Skycity Entertainment
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AiMedia and Skycity is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding AiMedia Technologies and Skycity Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skycity Entertainment and AiMedia Technologies 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 AiMedia Technologies are associated (or correlated) with Skycity Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skycity Entertainment has no effect on the direction of AiMedia Technologies i.e., AiMedia Technologies and Skycity Entertainment go up and down completely randomly.
Pair Corralation between AiMedia Technologies and Skycity Entertainment
Assuming the 90 days trading horizon AiMedia Technologies is expected to under-perform the Skycity Entertainment. In addition to that, AiMedia Technologies is 2.19 times more volatile than Skycity Entertainment Group. It trades about -0.1 of its total potential returns per unit of risk. Skycity Entertainment Group is currently generating about 0.11 per unit of volatility. If you would invest 127.00 in Skycity Entertainment Group on August 30, 2024 and sell it today you would earn a total of 7.00 from holding Skycity Entertainment Group or generate 5.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AiMedia Technologies vs. Skycity Entertainment Group
Performance |
| Timeline |
| AiMedia Technologies |
| Skycity Entertainment |
AiMedia Technologies and Skycity Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AiMedia Technologies and Skycity Entertainment
The main advantage of trading using opposite AiMedia Technologies and Skycity Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AiMedia Technologies position performs unexpectedly, Skycity Entertainment 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 Skycity Entertainment will offset losses from the drop in Skycity Entertainment's long position.| AiMedia Technologies vs. PVW Resources | AiMedia Technologies vs. Woolworths | AiMedia Technologies vs. Wesfarmers | AiMedia Technologies vs. Coles Group |
| Skycity Entertainment vs. Summit Resources Limited | Skycity Entertainment vs. Champion Iron | Skycity Entertainment vs. Ridley | Skycity Entertainment vs. Peel Mining |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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