Correlation Between ASE Industrial and Sino American
Can any of the company-specific risk be diversified away by investing in both ASE Industrial and Sino American 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 Sino American 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 Sino American Silicon Products, you can compare the effects of market volatilities on ASE Industrial and Sino American 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 Sino American. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and Sino American.
Diversification Opportunities for ASE Industrial and Sino American
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ASE and Sino is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and Sino American Silicon Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino American Silicon 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 Sino American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino American Silicon has no effect on the direction of ASE Industrial i.e., ASE Industrial and Sino American go up and down completely randomly.
Pair Corralation between ASE Industrial and Sino American
Assuming the 90 days trading horizon ASE Industrial is expected to generate 1.39 times less return on investment than Sino American. In addition to that, ASE Industrial is 1.16 times more volatile than Sino American Silicon Products. It trades about 0.31 of its total potential returns per unit of risk. Sino American Silicon Products is currently generating about 0.5 per unit of volatility. If you would invest 11,250 in Sino American Silicon Products on November 28, 2024 and sell it today you would earn a total of 1,550 from holding Sino American Silicon Products or generate 13.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASE Industrial Holding vs. Sino American Silicon Products
Performance |
| Timeline |
| ASE Industrial Holding |
| Sino American Silicon |
ASE Industrial and Sino American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASE Industrial and Sino American
The main advantage of trading using opposite ASE Industrial and Sino American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial position performs unexpectedly, Sino American 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 Sino American will offset losses from the drop in Sino American'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 |
| Sino American vs. GlobalWafers Co | Sino American vs. Wafer Works | Sino American vs. Motech Industries Co | Sino American vs. WIN Semiconductors |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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