Correlation Between ASE Industrial and Highwealth Construction
Can any of the company-specific risk be diversified away by investing in both ASE Industrial and Highwealth Construction 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 Highwealth Construction 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 Highwealth Construction Corp, you can compare the effects of market volatilities on ASE Industrial and Highwealth Construction 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 Highwealth Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and Highwealth Construction.
Diversification Opportunities for ASE Industrial and Highwealth Construction
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ASE and Highwealth is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and Highwealth Construction Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highwealth Construction 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 Highwealth Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highwealth Construction has no effect on the direction of ASE Industrial i.e., ASE Industrial and Highwealth Construction go up and down completely randomly.
Pair Corralation between ASE Industrial and Highwealth Construction
Assuming the 90 days trading horizon ASE Industrial Holding is expected to under-perform the Highwealth Construction. In addition to that, ASE Industrial is 1.11 times more volatile than Highwealth Construction Corp. It trades about -0.13 of its total potential returns per unit of risk. Highwealth Construction Corp is currently generating about 0.33 per unit of volatility. If you would invest 4,100 in Highwealth Construction Corp on August 30, 2024 and sell it today you would earn a total of 505.00 from holding Highwealth Construction Corp or generate 12.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
ASE Industrial Holding vs. Highwealth Construction Corp
Performance |
| Timeline |
| ASE Industrial Holding |
| Highwealth Construction |
ASE Industrial and Highwealth Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASE Industrial and Highwealth Construction
The main advantage of trading using opposite ASE Industrial and Highwealth Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial position performs unexpectedly, Highwealth Construction 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 Highwealth Construction will offset losses from the drop in Highwealth Construction'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 |
| Highwealth Construction vs. Huaku Development Co | Highwealth Construction vs. Farglory Land Development | Highwealth Construction vs. Ruentex Development Co | Highwealth Construction vs. Ruentex Industries |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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