Correlation Between ASE Industrial and Tai Tung
Can any of the company-specific risk be diversified away by investing in both ASE Industrial and Tai Tung 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 Tai Tung 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 Tai Tung Communication, you can compare the effects of market volatilities on ASE Industrial and Tai Tung 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 Tai Tung. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and Tai Tung.
Diversification Opportunities for ASE Industrial and Tai Tung
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between ASE and Tai is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and Tai Tung Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tai Tung Communication 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 Tai Tung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tai Tung Communication has no effect on the direction of ASE Industrial i.e., ASE Industrial and Tai Tung go up and down completely randomly.
Pair Corralation between ASE Industrial and Tai Tung
Assuming the 90 days trading horizon ASE Industrial is expected to generate 1.78 times less return on investment than Tai Tung. But when comparing it to its historical volatility, ASE Industrial Holding is 1.41 times less risky than Tai Tung. It trades about 0.04 of its potential returns per unit of risk. Tai Tung Communication is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,035 in Tai Tung Communication on September 3, 2024 and sell it today you would earn a total of 615.00 from holding Tai Tung Communication or generate 30.22% 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. Tai Tung Communication
Performance |
| Timeline |
| ASE Industrial Holding |
| Tai Tung Communication |
ASE Industrial and Tai Tung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASE Industrial and Tai Tung
The main advantage of trading using opposite ASE Industrial and Tai Tung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial position performs unexpectedly, Tai Tung 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 Tai Tung will offset losses from the drop in Tai Tung'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 |
| Tai Tung vs. Taiwan Semiconductor Manufacturing | Tai Tung vs. Yang Ming Marine | Tai Tung vs. ASE Industrial Holding | Tai Tung 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |