Correlation Between ASE Industrial and EnTie Commercial
Can any of the company-specific risk be diversified away by investing in both ASE Industrial and EnTie Commercial 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 EnTie Commercial 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 EnTie Commercial Bank, you can compare the effects of market volatilities on ASE Industrial and EnTie Commercial 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 EnTie Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and EnTie Commercial.
Diversification Opportunities for ASE Industrial and EnTie Commercial
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ASE and EnTie is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and EnTie Commercial Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EnTie Commercial Bank 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 EnTie Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EnTie Commercial Bank has no effect on the direction of ASE Industrial i.e., ASE Industrial and EnTie Commercial go up and down completely randomly.
Pair Corralation between ASE Industrial and EnTie Commercial
Assuming the 90 days trading horizon ASE Industrial Holding is expected to generate 2.0 times more return on investment than EnTie Commercial. However, ASE Industrial is 2.0 times more volatile than EnTie Commercial Bank. It trades about 0.06 of its potential returns per unit of risk. EnTie Commercial Bank is currently generating about 0.0 per unit of risk. If you would invest 10,300 in ASE Industrial Holding on October 24, 2024 and sell it today you would earn a total of 6,900 from holding ASE Industrial Holding or generate 66.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASE Industrial Holding vs. EnTie Commercial Bank
Performance |
| Timeline |
| ASE Industrial Holding |
| EnTie Commercial Bank |
ASE Industrial and EnTie Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASE Industrial and EnTie Commercial
The main advantage of trading using opposite ASE Industrial and EnTie Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial position performs unexpectedly, EnTie Commercial 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 EnTie Commercial will offset losses from the drop in EnTie Commercial'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 |
| EnTie Commercial vs. Union Bank of | EnTie Commercial vs. Bank of Kaohsiung | EnTie Commercial vs. Taiwan Business Bank | EnTie Commercial vs. Chang Hwa Commercial |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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