Correlation Between ASE Industrial and Pan International
Can any of the company-specific risk be diversified away by investing in both ASE Industrial and Pan International 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 ASE Industrial and Pan International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASE Industrial Holding and Pan International Industrial Corp, you can compare the effects of market volatilities on ASE Industrial and Pan International 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 ASE Industrial with a short position of Pan International. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and Pan International.
Diversification Opportunities for ASE Industrial and Pan International
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between ASE and Pan is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and Pan International Industrial C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan International and ASE Industrial 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 ASE Industrial Holding are associated (or correlated) with Pan International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan International has no effect on the direction of ASE Industrial i.e., ASE Industrial and Pan International go up and down completely randomly.
Pair Corralation between ASE Industrial and Pan International
Assuming the 90 days trading horizon ASE Industrial Holding is expected to generate 0.88 times more return on investment than Pan International. However, ASE Industrial Holding is 1.14 times less risky than Pan International. It trades about 0.02 of its potential returns per unit of risk. Pan International Industrial Corp is currently generating about -0.17 per unit of risk. If you would invest 15,750 in ASE Industrial Holding on September 12, 2024 and sell it today you would earn a total of 50.00 from holding ASE Industrial Holding or generate 0.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASE Industrial Holding vs. Pan International Industrial C
Performance |
| Timeline |
| ASE Industrial Holding |
| Pan International |
ASE Industrial and Pan International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASE Industrial and Pan International
The main advantage of trading using opposite ASE Industrial and Pan International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial position performs unexpectedly, Pan International 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 Pan International will offset losses from the drop in Pan International's long position.| ASE Industrial vs. AU Optronics | ASE Industrial vs. Innolux Corp | ASE Industrial vs. Ruentex Development Co | ASE Industrial vs. WiseChip Semiconductor |
| Pan International vs. Hunya Foods Co | Pan International vs. Hi Lai Foods Co | Pan International vs. Sunspring Metal Corp | Pan International vs. Lian Hwa Foods |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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