Correlation Between ASE Industrial and Elitegroup Computer
Can any of the company-specific risk be diversified away by investing in both ASE Industrial and Elitegroup Computer 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 Elitegroup Computer 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 Elitegroup Computer Systems, you can compare the effects of market volatilities on ASE Industrial and Elitegroup Computer 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 Elitegroup Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and Elitegroup Computer.
Diversification Opportunities for ASE Industrial and Elitegroup Computer
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between ASE and Elitegroup is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and Elitegroup Computer Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elitegroup Computer 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 Elitegroup Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elitegroup Computer has no effect on the direction of ASE Industrial i.e., ASE Industrial and Elitegroup Computer go up and down completely randomly.
Pair Corralation between ASE Industrial and Elitegroup Computer
Assuming the 90 days trading horizon ASE Industrial Holding is expected to generate 0.91 times more return on investment than Elitegroup Computer. However, ASE Industrial Holding is 1.09 times less risky than Elitegroup Computer. It trades about 0.03 of its potential returns per unit of risk. Elitegroup Computer Systems is currently generating about -0.01 per unit of risk. If you would invest 12,550 in ASE Industrial Holding on September 3, 2024 and sell it today you would earn a total of 2,600 from holding ASE Industrial Holding or generate 20.72% 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. Elitegroup Computer Systems
Performance |
| Timeline |
| ASE Industrial Holding |
| Elitegroup Computer |
ASE Industrial and Elitegroup Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASE Industrial and Elitegroup Computer
The main advantage of trading using opposite ASE Industrial and Elitegroup Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial position performs unexpectedly, Elitegroup Computer 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 Elitegroup Computer will offset losses from the drop in Elitegroup Computer's long position.| ASE Industrial vs. Delta Electronics | ASE Industrial vs. Novatek Microelectronics Corp | ASE Industrial vs. United Microelectronics | ASE Industrial vs. LARGAN Precision Co |
| Elitegroup Computer vs. Taiwan Semiconductor Manufacturing | Elitegroup Computer vs. Yang Ming Marine | Elitegroup Computer vs. ASE Industrial Holding | Elitegroup Computer vs. AU Optronics |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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