Correlation Between ASE Industrial and Catcher Technology
Can any of the company-specific risk be diversified away by investing in both ASE Industrial and Catcher Technology 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 Catcher Technology 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 Catcher Technology Co, you can compare the effects of market volatilities on ASE Industrial and Catcher Technology 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 Catcher Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and Catcher Technology.
Diversification Opportunities for ASE Industrial and Catcher Technology
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between ASE and Catcher is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and Catcher Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catcher Technology 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 Catcher Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catcher Technology has no effect on the direction of ASE Industrial i.e., ASE Industrial and Catcher Technology go up and down completely randomly.
Pair Corralation between ASE Industrial and Catcher Technology
Assuming the 90 days trading horizon ASE Industrial Holding is expected to generate 1.52 times more return on investment than Catcher Technology. However, ASE Industrial is 1.52 times more volatile than Catcher Technology Co. It trades about 0.05 of its potential returns per unit of risk. Catcher Technology Co is currently generating about 0.03 per unit of risk. If you would invest 9,630 in ASE Industrial Holding on September 3, 2024 and sell it today you would earn a total of 5,520 from holding ASE Industrial Holding or generate 57.32% 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. Catcher Technology Co
Performance |
| Timeline |
| ASE Industrial Holding |
| Catcher Technology |
ASE Industrial and Catcher Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASE Industrial and Catcher Technology
The main advantage of trading using opposite ASE Industrial and Catcher Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial position performs unexpectedly, Catcher Technology 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 Catcher Technology will offset losses from the drop in Catcher Technology'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 |
| Catcher Technology vs. Taiwan Semiconductor Manufacturing | Catcher Technology vs. Yang Ming Marine | Catcher Technology vs. ASE Industrial Holding | Catcher Technology 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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