Correlation Between EMemory Technology and Asmedia Technology

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

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

Diversification Opportunities for EMemory Technology and Asmedia Technology

0.47

Correlation Coefficient

EMemory Technology  Asmedia Technology

Very weak diversification

The 3 months correlation between EMemory and Asmedia is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding eMemory Technology and Asmedia Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asmedia Technology and EMemory Technology 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 eMemory Technology 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 EMemory Technology i.e., EMemory Technology and Asmedia Technology go up and down completely randomly.

Pair Corralation between EMemory Technology and Asmedia Technology

Assuming the 90 days trading horizon eMemory Technology is expected to under-perform the Asmedia Technology. In addition to that, EMemory Technology is 1.25 times more volatile than Asmedia Technology. It trades about -0.15 of its total potential returns per unit of risk. Asmedia Technology is currently generating about -0.01 per unit of volatility. If you would invest  198,500  in Asmedia Technology on December 31, 2024 and sell it today you would lose (5,500) from holding Asmedia Technology or give up 2.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

eMemory Technology  vs.  Asmedia Technology

eMemory Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days eMemory Technology 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 May 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Asmedia Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Asmedia Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Asmedia Technology is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with EMemory Technology and Asmedia Technology

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

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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.