Correlation Between Asm Pacific and Advantest Corp
Can any of the company-specific risk be diversified away by investing in both Asm Pacific and Advantest Corp 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 Asm Pacific and Advantest Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asm Pacific Technology and Advantest Corp DRC, you can compare the effects of market volatilities on Asm Pacific and Advantest Corp 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 Asm Pacific with a short position of Advantest Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asm Pacific and Advantest Corp.
Diversification Opportunities for Asm Pacific and Advantest Corp
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asm and Advantest is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Asm Pacific Technology and Advantest Corp DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantest Corp DRC and Asm Pacific 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 Asm Pacific Technology are associated (or correlated) with Advantest Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantest Corp DRC has no effect on the direction of Asm Pacific i.e., Asm Pacific and Advantest Corp go up and down completely randomly.
Pair Corralation between Asm Pacific and Advantest Corp
If you would invest 2,954 in Asm Pacific Technology on August 28, 2024 and sell it today you would lose (211.00) from holding Asm Pacific Technology or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.28% |
| Values | Daily Returns |
Asm Pacific Technology vs. Advantest Corp DRC
Performance |
| Timeline |
| Asm Pacific Technology |
| Advantest Corp DRC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Asm Pacific and Advantest Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asm Pacific and Advantest Corp
The main advantage of trading using opposite Asm Pacific and Advantest Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asm Pacific position performs unexpectedly, Advantest Corp 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 Advantest Corp will offset losses from the drop in Advantest Corp's long position.| Asm Pacific vs. ASML Holding NV | Asm Pacific vs. Applied Materials | Asm Pacific vs. Lam Research Corp | Asm Pacific vs. KLA Tencor |
| Advantest Corp vs. Disco Corp ADR | Advantest Corp vs. Tokyo Electron | Advantest Corp vs. Lasertec | Advantest Corp vs. BE Semiconductor Industries |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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