Correlation Between ASE Industrial and Hannstar Display
Can any of the company-specific risk be diversified away by investing in both ASE Industrial and Hannstar Display 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 Hannstar Display 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 Hannstar Display Corp, you can compare the effects of market volatilities on ASE Industrial and Hannstar Display 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 Hannstar Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and Hannstar Display.
Diversification Opportunities for ASE Industrial and Hannstar Display
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ASE and Hannstar is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and Hannstar Display Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hannstar Display Corp 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 Hannstar Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hannstar Display Corp has no effect on the direction of ASE Industrial i.e., ASE Industrial and Hannstar Display go up and down completely randomly.
Pair Corralation between ASE Industrial and Hannstar Display
Assuming the 90 days trading horizon ASE Industrial Holding is expected to generate 1.51 times more return on investment than Hannstar Display. However, ASE Industrial is 1.51 times more volatile than Hannstar Display Corp. It trades about 0.04 of its potential returns per unit of risk. Hannstar Display Corp is currently generating about -0.19 per unit of risk. If you would invest 15,250 in ASE Industrial Holding on September 4, 2024 and sell it today you would earn a total of 200.00 from holding ASE Industrial Holding or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASE Industrial Holding vs. Hannstar Display Corp
Performance |
| Timeline |
| ASE Industrial Holding |
| Hannstar Display Corp |
ASE Industrial and Hannstar Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASE Industrial and Hannstar Display
The main advantage of trading using opposite ASE Industrial and Hannstar Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial position performs unexpectedly, Hannstar Display 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 Hannstar Display will offset losses from the drop in Hannstar Display'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 |
| Hannstar Display vs. Taiwan Semiconductor Manufacturing | Hannstar Display vs. Yang Ming Marine | Hannstar Display vs. AU Optronics | Hannstar Display 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |