Correlation Between Analog Integrations and Asmedia Technology

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

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

Diversification Opportunities for Analog Integrations and Asmedia Technology

0.21

Correlation Coefficient

Analog Integrations  Asmedia Technology

Modest diversification

The 3 months correlation between Analog and Asmedia is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Analog Integrations and Asmedia Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asmedia Technology and Analog Integrations 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 Analog Integrations are associated (or correlated) with Asmedia Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asmedia Technology has no effect on the direction of Analog Integrations i.e., Analog Integrations and Asmedia Technology go up and down completely randomly.

Pair Corralation between Analog Integrations and Asmedia Technology

Assuming the 90 days trading horizon Analog Integrations is expected to generate 1.28 times more return on investment than Asmedia Technology. However, Analog Integrations is 1.28 times more volatile than Asmedia Technology. It trades about 0.14 of its potential returns per unit of risk. Asmedia Technology is currently generating about -0.03 per unit of risk. If you would invest  8,960  in Analog Integrations on December 5, 2024 and sell it today you would earn a total of  1,340  from holding Analog Integrations or generate 14.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	97.14%
Values	Daily Returns

Analog Integrations  vs.  Asmedia Technology

Analog Integrations

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Analog Integrations are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Analog Integrations showed solid returns over the last few months and may actually be approaching a breakup point.

Asmedia Technology

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Asmedia Technology are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Asmedia Technology may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Analog Integrations and Asmedia Technology

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

The idea behind Analog Integrations and Asmedia 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.

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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.