Correlation Between Asmedia Technology and Da Li
Can any of the company-specific risk be diversified away by investing in both Asmedia Technology and Da Li 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 Da Li into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asmedia Technology and Da Li Development Co, you can compare the effects of market volatilities on Asmedia Technology and Da Li 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 Da Li. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asmedia Technology and Da Li.
Diversification Opportunities for Asmedia Technology and Da Li
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asmedia and 6177 is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Asmedia Technology and Da Li Development Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Da Li Development 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 Da Li. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Da Li Development has no effect on the direction of Asmedia Technology i.e., Asmedia Technology and Da Li go up and down completely randomly.
Pair Corralation between Asmedia Technology and Da Li
Assuming the 90 days trading horizon Asmedia Technology is expected to generate 1.31 times more return on investment than Da Li. However, Asmedia Technology is 1.31 times more volatile than Da Li Development Co. It trades about 0.07 of its potential returns per unit of risk. Da Li Development Co is currently generating about 0.05 per unit of risk. If you would invest 113,500 in Asmedia Technology on September 26, 2024 and sell it today you would earn a total of 86,500 from holding Asmedia Technology or generate 76.21% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 99.67% |
Values | Daily Returns |
Asmedia Technology vs. Da Li Development Co
Performance |
Timeline |
Asmedia Technology |
Da Li Development |
Asmedia Technology and Da Li Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Asmedia Technology and Da Li
The main advantage of trading using opposite Asmedia Technology and Da Li positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asmedia Technology position performs unexpectedly, Da Li 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 Da Li will offset losses from the drop in Da Li's long position.Asmedia Technology vs. Century Wind Power | Asmedia Technology vs. Green World Fintech | Asmedia Technology vs. Ingentec | Asmedia Technology vs. Chaheng Precision Co |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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