Correlation Between EMvision Medical and AiMedia Technologies
Can any of the company-specific risk be diversified away by investing in both EMvision Medical and AiMedia Technologies 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 EMvision Medical and AiMedia Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMvision Medical Devices and AiMedia Technologies, you can compare the effects of market volatilities on EMvision Medical and AiMedia Technologies 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 EMvision Medical with a short position of AiMedia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMvision Medical and AiMedia Technologies.
Diversification Opportunities for EMvision Medical and AiMedia Technologies
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EMvision and AiMedia is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding EMvision Medical Devices and AiMedia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AiMedia Technologies and EMvision Medical 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 EMvision Medical Devices are associated (or correlated) with AiMedia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AiMedia Technologies has no effect on the direction of EMvision Medical i.e., EMvision Medical and AiMedia Technologies go up and down completely randomly.
Pair Corralation between EMvision Medical and AiMedia Technologies
Assuming the 90 days trading horizon EMvision Medical Devices is expected to generate 0.67 times more return on investment than AiMedia Technologies. However, EMvision Medical Devices is 1.48 times less risky than AiMedia Technologies. It trades about -0.06 of its potential returns per unit of risk. AiMedia Technologies is currently generating about -0.14 per unit of risk. If you would invest 199.00 in EMvision Medical Devices on August 29, 2024 and sell it today you would lose (11.00) from holding EMvision Medical Devices or give up 5.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EMvision Medical Devices vs. AiMedia Technologies
Performance |
| Timeline |
| EMvision Medical Devices |
| AiMedia Technologies |
EMvision Medical and AiMedia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMvision Medical and AiMedia Technologies
The main advantage of trading using opposite EMvision Medical and AiMedia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMvision Medical position performs unexpectedly, AiMedia Technologies 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 AiMedia Technologies will offset losses from the drop in AiMedia Technologies' long position.| EMvision Medical vs. EVE Health Group | EMvision Medical vs. Charter Hall Retail | EMvision Medical vs. Saferoads Holdings | EMvision Medical vs. Group 6 Metals |
| AiMedia Technologies vs. National Australia Bank | AiMedia Technologies vs. National Australia Bank | AiMedia Technologies vs. Westpac Banking | AiMedia Technologies vs. National Australia Bank |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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