Correlation Between WIN Semiconductors and ASE Industrial
Can any of the company-specific risk be diversified away by investing in both WIN Semiconductors 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 WIN Semiconductors and ASE Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WIN Semiconductors and ASE Industrial Holding, you can compare the effects of market volatilities on WIN Semiconductors 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 WIN Semiconductors with a short position of ASE Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIN Semiconductors and ASE Industrial.
Diversification Opportunities for WIN Semiconductors and ASE Industrial
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WIN and ASE is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding WIN Semiconductors 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 WIN Semiconductors 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 WIN Semiconductors 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 WIN Semiconductors i.e., WIN Semiconductors and ASE Industrial go up and down completely randomly.
Pair Corralation between WIN Semiconductors and ASE Industrial
Assuming the 90 days trading horizon WIN Semiconductors is expected to generate 1.21 times more return on investment than ASE Industrial. However, WIN Semiconductors is 1.21 times more volatile than ASE Industrial Holding. It trades about 0.39 of its potential returns per unit of risk. ASE Industrial Holding is currently generating about 0.31 per unit of risk. If you would invest 10,000 in WIN Semiconductors on November 28, 2024 and sell it today you would earn a total of 1,500 from holding WIN Semiconductors or generate 15.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WIN Semiconductors vs. ASE Industrial Holding
Performance |
| Timeline |
| WIN Semiconductors |
| ASE Industrial Holding |
WIN Semiconductors and ASE Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WIN Semiconductors and ASE Industrial
The main advantage of trading using opposite WIN Semiconductors and ASE Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIN Semiconductors 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.| WIN Semiconductors vs. LARGAN Precision Co | WIN Semiconductors vs. GlobalWafers Co | WIN Semiconductors vs. Novatek Microelectronics Corp | WIN Semiconductors vs. Advanced Wireless Semiconductor |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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