Correlation Between StShine Optical and Asmedia Technology

Can any of the company-specific risk be diversified away by investing in both StShine Optical 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 StShine Optical and Asmedia Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between StShine Optical Co and Asmedia Technology, you can compare the effects of market volatilities on StShine Optical 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 StShine Optical with a short position of Asmedia Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of StShine Optical and Asmedia Technology.

Diversification Opportunities for StShine Optical and Asmedia Technology

-0.89

Correlation Coefficient

StShine Optical  Asmedia Technology

Pay attention - limited upside

The 3 months correlation between StShine and Asmedia is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding StShine Optical Co and Asmedia Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asmedia Technology and StShine Optical 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 StShine Optical Co 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 StShine Optical i.e., StShine Optical and Asmedia Technology go up and down completely randomly.

Pair Corralation between StShine Optical and Asmedia Technology

Assuming the 90 days trading horizon StShine Optical is expected to generate 3.22 times less return on investment than Asmedia Technology. But when comparing it to its historical volatility, StShine Optical Co is 1.56 times less risky than Asmedia Technology. It trades about 0.05 of its potential returns per unit of risk. Asmedia Technology is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  148,000  in Asmedia Technology on December 5, 2024 and sell it today you would earn a total of  58,500  from holding Asmedia Technology or generate 39.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.15%
Values	Daily Returns

StShine Optical Co  vs.  Asmedia Technology

StShine Optical

Risk-Adjusted Performance

Very Weak

Over the last 90 days StShine Optical Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Asmedia Technology

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Asmedia Technology are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Asmedia Technology may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with StShine Optical and Asmedia Technology

The main advantage of trading using opposite StShine Optical and Asmedia Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if StShine Optical 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.

The idea behind StShine Optical Co and Asmedia Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.