Correlation Between Asmedia Technology and Fun Yours

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

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

Diversification Opportunities for Asmedia Technology and Fun Yours

0.26

Correlation Coefficient

Asmedia Technology  Fun Yours

Modest diversification

The 3 months correlation between Asmedia and Fun is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Asmedia Technology and Fun Yours Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fun Yours 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 Fun Yours. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fun Yours Technology has no effect on the direction of Asmedia Technology i.e., Asmedia Technology and Fun Yours go up and down completely randomly.

Pair Corralation between Asmedia Technology and Fun Yours

Assuming the 90 days trading horizon Asmedia Technology is expected to generate 9.65 times less return on investment than Fun Yours. But when comparing it to its historical volatility, Asmedia Technology is 13.21 times less risky than Fun Yours. It trades about 0.06 of its potential returns per unit of risk. Fun Yours Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  3,307  in Fun Yours Technology on October 24, 2024 and sell it today you would earn a total of  1,693  from holding Fun Yours Technology or generate 51.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.59%
Values	Daily Returns

Asmedia Technology  vs.  Fun Yours Technology

Asmedia Technology

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Asmedia Technology are ranked lower than 9 (%) 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.

Fun Yours Technology

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fun Yours Technology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Fun Yours 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 Asmedia Technology and Fun Yours

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

The idea behind Asmedia Technology and Fun Yours 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.