Correlation Between EMemory Technology and ASE Industrial
Can any of the company-specific risk be diversified away by investing in both EMemory Technology 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 EMemory Technology and ASE Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eMemory Technology and ASE Industrial Holding, you can compare the effects of market volatilities on EMemory Technology 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 EMemory Technology with a short position of ASE Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMemory Technology and ASE Industrial.
Diversification Opportunities for EMemory Technology and ASE Industrial
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between EMemory and ASE is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding eMemory Technology 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 EMemory Technology 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 eMemory Technology 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 EMemory Technology i.e., EMemory Technology and ASE Industrial go up and down completely randomly.
Pair Corralation between EMemory Technology and ASE Industrial
Assuming the 90 days trading horizon eMemory Technology is expected to generate 1.54 times more return on investment than ASE Industrial. However, EMemory Technology is 1.54 times more volatile than ASE Industrial Holding. It trades about 0.06 of its potential returns per unit of risk. ASE Industrial Holding is currently generating about 0.05 per unit of risk. If you would invest 146,534 in eMemory Technology on August 30, 2024 and sell it today you would earn a total of 136,966 from holding eMemory Technology or generate 93.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
eMemory Technology vs. ASE Industrial Holding
Performance |
| Timeline |
| eMemory Technology |
| ASE Industrial Holding |
EMemory Technology and ASE Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMemory Technology and ASE Industrial
The main advantage of trading using opposite EMemory Technology and ASE Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMemory Technology 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.| EMemory Technology vs. Nan Ya Printed | EMemory Technology vs. Global Unichip Corp | EMemory Technology vs. Aspeed Technology | EMemory Technology vs. Alchip Technologies |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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