Correlation Between Advanced Micro and ASE Industrial
Can any of the company-specific risk be diversified away by investing in both Advanced Micro and ASE Industrial 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 Advanced Micro and ASE Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Micro Devices and ASE Industrial Holding, you can compare the effects of market volatilities on Advanced Micro and ASE Industrial 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 Advanced Micro with a short position of ASE Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Micro and ASE Industrial.
Diversification Opportunities for Advanced Micro and ASE Industrial
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Advanced and ASE is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices and ASE Industrial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASE Industrial Holding and Advanced Micro 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 Advanced Micro Devices are associated (or correlated) with ASE Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASE Industrial Holding has no effect on the direction of Advanced Micro i.e., Advanced Micro and ASE Industrial go up and down completely randomly.
Pair Corralation between Advanced Micro and ASE Industrial
Considering the 90-day investment horizon Advanced Micro is expected to generate 1.15 times less return on investment than ASE Industrial. In addition to that, Advanced Micro is 1.34 times more volatile than ASE Industrial Holding. It trades about 0.02 of its total potential returns per unit of risk. ASE Industrial Holding is currently generating about 0.04 per unit of volatility. If you would invest 842.00 in ASE Industrial Holding on September 2, 2024 and sell it today you would earn a total of 130.00 from holding ASE Industrial Holding or generate 15.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Micro Devices vs. ASE Industrial Holding
Performance |
| Timeline |
| Advanced Micro Devices |
| ASE Industrial Holding |
Advanced Micro and ASE Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Micro and ASE Industrial
The main advantage of trading using opposite Advanced Micro and ASE Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Micro position performs unexpectedly, ASE Industrial 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 ASE Industrial will offset losses from the drop in ASE Industrial's long position.| Advanced Micro vs. Taiwan Semiconductor Manufacturing | Advanced Micro vs. Intel | Advanced Micro vs. Marvell Technology Group | Advanced Micro vs. Micron Technology |
| ASE Industrial vs. NXP Semiconductors NV | ASE Industrial vs. GSI Technology | ASE Industrial vs. MaxLinear | ASE Industrial vs. Texas Instruments Incorporated |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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