Correlation Between Yageo Corp and ASE Industrial
Can any of the company-specific risk be diversified away by investing in both Yageo Corp 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 Yageo Corp and ASE Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yageo Corp and ASE Industrial Holding, you can compare the effects of market volatilities on Yageo Corp 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 Yageo Corp with a short position of ASE Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yageo Corp and ASE Industrial.
Diversification Opportunities for Yageo Corp and ASE Industrial
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yageo and ASE is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Yageo Corp 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 Yageo Corp 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 Yageo Corp 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 Yageo Corp i.e., Yageo Corp and ASE Industrial go up and down completely randomly.
Pair Corralation between Yageo Corp and ASE Industrial
Assuming the 90 days trading horizon Yageo Corp is expected to under-perform the ASE Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Yageo Corp is 1.14 times less risky than ASE Industrial. The stock trades about -0.05 of its potential returns per unit of risk. The ASE Industrial Holding is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 15,350 in ASE Industrial Holding on November 28, 2024 and sell it today you would earn a total of 2,300 from holding ASE Industrial Holding or generate 14.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yageo Corp vs. ASE Industrial Holding
Performance |
| Timeline |
| Yageo Corp |
| ASE Industrial Holding |
Yageo Corp and ASE Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yageo Corp and ASE Industrial
The main advantage of trading using opposite Yageo Corp and ASE Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yageo Corp 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.| Yageo Corp vs. Oriental Union Chemical | Yageo Corp vs. Mechema Chemicals Int | Yageo Corp vs. Acelon Chemicals Fiber | Yageo Corp vs. San Fu Chemical |
| ASE Industrial vs. Delta Electronics | ASE Industrial vs. Novatek Microelectronics Corp | ASE Industrial vs. United Microelectronics | ASE Industrial vs. LARGAN Precision Co |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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