Correlation Between ASE Industrial and Flexium Interconnect
Can any of the company-specific risk be diversified away by investing in both ASE Industrial and Flexium Interconnect 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 Flexium Interconnect 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 Flexium Interconnect, you can compare the effects of market volatilities on ASE Industrial and Flexium Interconnect 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 Flexium Interconnect. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and Flexium Interconnect.
Diversification Opportunities for ASE Industrial and Flexium Interconnect
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between ASE and Flexium is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and Flexium Interconnect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flexium Interconnect 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 Flexium Interconnect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flexium Interconnect has no effect on the direction of ASE Industrial i.e., ASE Industrial and Flexium Interconnect go up and down completely randomly.
Pair Corralation between ASE Industrial and Flexium Interconnect
Assuming the 90 days trading horizon ASE Industrial Holding is expected to generate 1.46 times more return on investment than Flexium Interconnect. However, ASE Industrial is 1.46 times more volatile than Flexium Interconnect. It trades about 0.04 of its potential returns per unit of risk. Flexium Interconnect is currently generating about -0.05 per unit of risk. If you would invest 13,100 in ASE Industrial Holding on September 4, 2024 and sell it today you would earn a total of 2,350 from holding ASE Industrial Holding or generate 17.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASE Industrial Holding vs. Flexium Interconnect
Performance |
| Timeline |
| ASE Industrial Holding |
| Flexium Interconnect |
ASE Industrial and Flexium Interconnect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASE Industrial and Flexium Interconnect
The main advantage of trading using opposite ASE Industrial and Flexium Interconnect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial position performs unexpectedly, Flexium Interconnect 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 Flexium Interconnect will offset losses from the drop in Flexium Interconnect's long position.| ASE Industrial vs. Taiwan Semiconductor Manufacturing | ASE Industrial vs. Yang Ming Marine | ASE Industrial vs. AU Optronics | ASE Industrial vs. Nan Ya Plastics |
| Flexium Interconnect vs. Taiwan Semiconductor Manufacturing | Flexium Interconnect vs. Yang Ming Marine | Flexium Interconnect vs. AU Optronics | Flexium Interconnect vs. Nan Ya Plastics |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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