Correlation Between ASE Industrial and Nan Ya
Can any of the company-specific risk be diversified away by investing in both ASE Industrial and Nan Ya 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 Nan Ya 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 Nan Ya Printed, you can compare the effects of market volatilities on ASE Industrial and Nan Ya 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 Nan Ya. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and Nan Ya.
Diversification Opportunities for ASE Industrial and Nan Ya
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ASE and Nan is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and Nan Ya Printed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nan Ya Printed 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 Nan Ya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nan Ya Printed has no effect on the direction of ASE Industrial i.e., ASE Industrial and Nan Ya go up and down completely randomly.
Pair Corralation between ASE Industrial and Nan Ya
Assuming the 90 days trading horizon ASE Industrial Holding is expected to generate 0.96 times more return on investment than Nan Ya. However, ASE Industrial Holding is 1.04 times less risky than Nan Ya. It trades about 0.06 of its potential returns per unit of risk. Nan Ya Printed is currently generating about -0.06 per unit of risk. If you would invest 9,730 in ASE Industrial Holding on September 12, 2024 and sell it today you would earn a total of 6,070 from holding ASE Industrial Holding or generate 62.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASE Industrial Holding vs. Nan Ya Printed
Performance |
| Timeline |
| ASE Industrial Holding |
| Nan Ya Printed |
ASE Industrial and Nan Ya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASE Industrial and Nan Ya
The main advantage of trading using opposite ASE Industrial and Nan Ya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial position performs unexpectedly, Nan Ya 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 Nan Ya will offset losses from the drop in Nan Ya's long position.| ASE Industrial vs. AU Optronics | ASE Industrial vs. Innolux Corp | ASE Industrial vs. Ruentex Development Co | ASE Industrial vs. WiseChip Semiconductor |
| Nan Ya vs. AU Optronics | Nan Ya vs. Innolux Corp | Nan Ya vs. Ruentex Development Co | Nan Ya vs. WiseChip Semiconductor |
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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