Correlation Between Asmedia Technology and Medeon Biodesign

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

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

Diversification Opportunities for Asmedia Technology and Medeon Biodesign

-0.09

Correlation Coefficient

Asmedia Technology  Medeon Biodesign

Good diversification

The 3 months correlation between Asmedia and Medeon is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Asmedia Technology and Medeon Biodesign in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medeon Biodesign 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 Medeon Biodesign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medeon Biodesign has no effect on the direction of Asmedia Technology i.e., Asmedia Technology and Medeon Biodesign go up and down completely randomly.

Pair Corralation between Asmedia Technology and Medeon Biodesign

Assuming the 90 days trading horizon Asmedia Technology is expected to under-perform the Medeon Biodesign. In addition to that, Asmedia Technology is 1.73 times more volatile than Medeon Biodesign. It trades about 0.0 of its total potential returns per unit of risk. Medeon Biodesign is currently generating about 0.22 per unit of volatility. If you would invest  3,970  in Medeon Biodesign on December 28, 2024 and sell it today you would earn a total of  795.00  from holding Medeon Biodesign or generate 20.03% return on investment over 90 days.

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

Asmedia Technology  vs.  Medeon Biodesign

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.

Medeon Biodesign

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Medeon Biodesign are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Medeon Biodesign showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Asmedia Technology and Medeon Biodesign

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

The idea behind Asmedia Technology and Medeon Biodesign 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.