Correlation Between Vivotek and ASE Industrial
Can any of the company-specific risk be diversified away by investing in both Vivotek 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 Vivotek and ASE Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vivotek and ASE Industrial Holding, you can compare the effects of market volatilities on Vivotek 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 Vivotek with a short position of ASE Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vivotek and ASE Industrial.
Diversification Opportunities for Vivotek and ASE Industrial
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Vivotek and ASE is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Vivotek 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 Vivotek 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 Vivotek 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 Vivotek i.e., Vivotek and ASE Industrial go up and down completely randomly.
Pair Corralation between Vivotek and ASE Industrial
Assuming the 90 days trading horizon Vivotek is expected to under-perform the ASE Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Vivotek is 1.08 times less risky than ASE Industrial. The stock trades about -0.03 of its potential returns per unit of risk. The ASE Industrial Holding is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 13,100 in ASE Industrial Holding on September 4, 2024 and sell it today you would earn a total of 2,350 from holding ASE Industrial Holding or generate 17.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vivotek vs. ASE Industrial Holding
Performance |
| Timeline |
| Vivotek |
| ASE Industrial Holding |
Vivotek and ASE Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vivotek and ASE Industrial
The main advantage of trading using opposite Vivotek and ASE Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vivotek 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.| Vivotek vs. Taiwan Semiconductor Manufacturing | Vivotek vs. Yang Ming Marine | Vivotek vs. AU Optronics | Vivotek vs. Nan Ya Plastics |
| ASE Industrial vs. Taiwan Semiconductor Manufacturing | ASE Industrial vs. Yang Ming Marine | ASE Industrial vs. AU Optronics | ASE Industrial vs. Nan Ya Plastics |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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