Correlation Between Asmedia Technology and Jetway Information

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

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

Diversification Opportunities for Asmedia Technology and Jetway Information

-0.57

Correlation Coefficient

Asmedia Technology  Jetway Information

Excellent diversification

The 3 months correlation between Asmedia and Jetway is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Asmedia Technology and Jetway Information Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jetway Information 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 Jetway Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jetway Information has no effect on the direction of Asmedia Technology i.e., Asmedia Technology and Jetway Information go up and down completely randomly.

Pair Corralation between Asmedia Technology and Jetway Information

Assuming the 90 days trading horizon Asmedia Technology is expected to generate 2.08 times more return on investment than Jetway Information. However, Asmedia Technology is 2.08 times more volatile than Jetway Information Co. It trades about 0.09 of its potential returns per unit of risk. Jetway Information Co is currently generating about -0.07 per unit of risk. If you would invest  179,500  in Asmedia Technology on October 11, 2024 and sell it today you would earn a total of  19,500  from holding Asmedia Technology or generate 10.86% return on investment over 90 days.

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

Asmedia Technology  vs.  Jetway Information Co

Asmedia Technology

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Asmedia Technology are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Asmedia Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Jetway Information

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Asmedia Technology and Jetway Information

The main advantage of trading using opposite Asmedia Technology and Jetway Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asmedia Technology position performs unexpectedly, Jetway Information 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 Jetway Information will offset losses from the drop in Jetway Information's long position.

The idea behind Asmedia Technology and Jetway Information Co 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.