Correlation Between Asmedia Technology and Arbor Technology
Can any of the company-specific risk be diversified away by investing in both Asmedia Technology and Arbor 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 Asmedia Technology and Arbor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asmedia Technology and Arbor Technology, you can compare the effects of market volatilities on Asmedia Technology and Arbor 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 Asmedia Technology with a short position of Arbor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asmedia Technology and Arbor Technology.
Diversification Opportunities for Asmedia Technology and Arbor Technology
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Asmedia and Arbor is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Asmedia Technology and Arbor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbor Technology and Asmedia 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 Asmedia Technology are associated (or correlated) with Arbor Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbor Technology has no effect on the direction of Asmedia Technology i.e., Asmedia Technology and Arbor Technology go up and down completely randomly.
Pair Corralation between Asmedia Technology and Arbor Technology
Assuming the 90 days trading horizon Asmedia Technology is expected to under-perform the Arbor Technology. But the stock apears to be less risky and, when comparing its historical volatility, Asmedia Technology is 1.14 times less risky than Arbor Technology. The stock trades about 0.0 of its potential returns per unit of risk. The Arbor Technology is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 5,090 in Arbor Technology on December 30, 2024 and sell it today you would lose (90.00) from holding Arbor Technology or give up 1.77% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Asmedia Technology vs. Arbor Technology
Performance |
Timeline |
Asmedia Technology |
Arbor Technology |
Asmedia Technology and Arbor Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Asmedia Technology and Arbor Technology
The main advantage of trading using opposite Asmedia Technology and Arbor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asmedia Technology position performs unexpectedly, Arbor 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 Arbor Technology will offset losses from the drop in Arbor Technology's long position.Asmedia Technology vs. Alchip Technologies | Asmedia Technology vs. Aspeed Technology | Asmedia Technology vs. Silergy Corp | Asmedia Technology vs. Global Unichip Corp |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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