Correlation Between ASE Industrial and Tainergy Tech
Can any of the company-specific risk be diversified away by investing in both ASE Industrial and Tainergy Tech 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 Tainergy Tech 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 Tainergy Tech Co, you can compare the effects of market volatilities on ASE Industrial and Tainergy Tech 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 Tainergy Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and Tainergy Tech.
Diversification Opportunities for ASE Industrial and Tainergy Tech
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ASE and Tainergy is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and Tainergy Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tainergy Tech 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 Tainergy Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tainergy Tech has no effect on the direction of ASE Industrial i.e., ASE Industrial and Tainergy Tech go up and down completely randomly.
Pair Corralation between ASE Industrial and Tainergy Tech
Assuming the 90 days trading horizon ASE Industrial Holding is expected to generate 0.89 times more return on investment than Tainergy Tech. However, ASE Industrial Holding is 1.12 times less risky than Tainergy Tech. It trades about 0.05 of its potential returns per unit of risk. Tainergy Tech Co is currently generating about -0.05 per unit of risk. If you would invest 9,800 in ASE Industrial Holding on September 4, 2024 and sell it today you would earn a total of 5,650 from holding ASE Industrial Holding or generate 57.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
ASE Industrial Holding vs. Tainergy Tech Co
Performance |
| Timeline |
| ASE Industrial Holding |
| Tainergy Tech |
ASE Industrial and Tainergy Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASE Industrial and Tainergy Tech
The main advantage of trading using opposite ASE Industrial and Tainergy Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial position performs unexpectedly, Tainergy Tech 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 Tainergy Tech will offset losses from the drop in Tainergy Tech's long position.| ASE Industrial vs. Taiwan Semiconductor Manufacturing | ASE Industrial vs. Yang Ming Marine | ASE Industrial vs. AU Optronics | ASE Industrial vs. Innolux Corp |
| Tainergy Tech vs. Taiwan Semiconductor Manufacturing | Tainergy Tech vs. Yang Ming Marine | Tainergy Tech vs. AU Optronics | Tainergy Tech vs. Innolux Corp |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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