Correlation Between ASE Industrial and Loop Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both ASE Industrial and Loop Telecommunicatio 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 Loop Telecommunicatio 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 Loop Telecommunication International, you can compare the effects of market volatilities on ASE Industrial and Loop Telecommunicatio 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 Loop Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and Loop Telecommunicatio.
Diversification Opportunities for ASE Industrial and Loop Telecommunicatio
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ASE and Loop is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and Loop Telecommunication Interna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loop Telecommunication 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 Loop Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loop Telecommunication has no effect on the direction of ASE Industrial i.e., ASE Industrial and Loop Telecommunicatio go up and down completely randomly.
Pair Corralation between ASE Industrial and Loop Telecommunicatio
Assuming the 90 days trading horizon ASE Industrial is expected to generate 1.96 times less return on investment than Loop Telecommunicatio. But when comparing it to its historical volatility, ASE Industrial Holding is 1.12 times less risky than Loop Telecommunicatio. It trades about 0.02 of its potential returns per unit of risk. Loop Telecommunication International is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 6,870 in Loop Telecommunication International on September 3, 2024 and sell it today you would earn a total of 620.00 from holding Loop Telecommunication International or generate 9.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASE Industrial Holding vs. Loop Telecommunication Interna
Performance |
| Timeline |
| ASE Industrial Holding |
| Loop Telecommunication |
ASE Industrial and Loop Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASE Industrial and Loop Telecommunicatio
The main advantage of trading using opposite ASE Industrial and Loop Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial position performs unexpectedly, Loop Telecommunicatio 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 Loop Telecommunicatio will offset losses from the drop in Loop Telecommunicatio'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 |
| Loop Telecommunicatio vs. Taiwan Semiconductor Manufacturing | Loop Telecommunicatio vs. Yang Ming Marine | Loop Telecommunicatio vs. ASE Industrial Holding | Loop Telecommunicatio 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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