Correlation Between Compeq Manufacturing and ASE Industrial
Can any of the company-specific risk be diversified away by investing in both Compeq Manufacturing and ASE Industrial 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 Compeq Manufacturing and ASE Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compeq Manufacturing Co and ASE Industrial Holding, you can compare the effects of market volatilities on Compeq Manufacturing and ASE Industrial 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 Compeq Manufacturing with a short position of ASE Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compeq Manufacturing and ASE Industrial.
Diversification Opportunities for Compeq Manufacturing and ASE Industrial
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Compeq and ASE is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Compeq Manufacturing Co and ASE Industrial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASE Industrial Holding and Compeq Manufacturing 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 Compeq Manufacturing Co are associated (or correlated) with ASE Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASE Industrial Holding has no effect on the direction of Compeq Manufacturing i.e., Compeq Manufacturing and ASE Industrial go up and down completely randomly.
Pair Corralation between Compeq Manufacturing and ASE Industrial
Assuming the 90 days trading horizon Compeq Manufacturing Co is expected to generate 1.14 times more return on investment than ASE Industrial. However, Compeq Manufacturing is 1.14 times more volatile than ASE Industrial Holding. It trades about 0.02 of its potential returns per unit of risk. ASE Industrial Holding is currently generating about 0.01 per unit of risk. If you would invest 6,340 in Compeq Manufacturing Co on September 12, 2024 and sell it today you would earn a total of 30.00 from holding Compeq Manufacturing Co or generate 0.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compeq Manufacturing Co vs. ASE Industrial Holding
Performance |
| Timeline |
| Compeq Manufacturing |
| ASE Industrial Holding |
Compeq Manufacturing and ASE Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compeq Manufacturing and ASE Industrial
The main advantage of trading using opposite Compeq Manufacturing and ASE Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compeq Manufacturing position performs unexpectedly, ASE Industrial 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 ASE Industrial will offset losses from the drop in ASE Industrial's long position.| Compeq Manufacturing vs. AU Optronics | Compeq Manufacturing vs. Innolux Corp | Compeq Manufacturing vs. Ruentex Development Co | Compeq Manufacturing vs. WiseChip Semiconductor |
| ASE Industrial vs. AU Optronics | ASE Industrial vs. Innolux Corp | ASE Industrial vs. Ruentex Development Co | ASE Industrial vs. WiseChip Semiconductor |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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