Correlation Between Skycity Entertainment and AiMedia Technologies
Can any of the company-specific risk be diversified away by investing in both Skycity Entertainment 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 Skycity Entertainment and AiMedia Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skycity Entertainment Group and AiMedia Technologies, you can compare the effects of market volatilities on Skycity Entertainment 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 Skycity Entertainment with a short position of AiMedia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skycity Entertainment and AiMedia Technologies.
Diversification Opportunities for Skycity Entertainment and AiMedia Technologies
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Skycity and AiMedia is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Skycity Entertainment Group and AiMedia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AiMedia Technologies and Skycity Entertainment 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 Skycity Entertainment Group 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 Skycity Entertainment i.e., Skycity Entertainment and AiMedia Technologies go up and down completely randomly.
Pair Corralation between Skycity Entertainment and AiMedia Technologies
Assuming the 90 days trading horizon Skycity Entertainment Group is expected to under-perform the AiMedia Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Skycity Entertainment Group is 1.95 times less risky than AiMedia Technologies. The stock trades about -0.04 of its potential returns per unit of risk. The AiMedia Technologies is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 35.00 in AiMedia Technologies on November 9, 2024 and sell it today you would earn a total of 27.00 from holding AiMedia Technologies or generate 77.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skycity Entertainment Group vs. AiMedia Technologies
Performance |
| Timeline |
| Skycity Entertainment |
| AiMedia Technologies |
Skycity Entertainment and AiMedia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skycity Entertainment and AiMedia Technologies
The main advantage of trading using opposite Skycity Entertainment and AiMedia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skycity Entertainment 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.| Skycity Entertainment vs. Event Hospitality and | Skycity Entertainment vs. Epsilon Healthcare | Skycity Entertainment vs. Computershare | Skycity Entertainment vs. Sonic Healthcare |
| AiMedia Technologies vs. Event Hospitality and | AiMedia Technologies vs. Data3 | AiMedia Technologies vs. Apiam Animal Health | AiMedia Technologies vs. Flagship Investments |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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