Correlation Between Asm Pacific and Tokyo Electron
Can any of the company-specific risk be diversified away by investing in both Asm Pacific and Tokyo Electron 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 Tokyo Electron 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 Tokyo Electron, you can compare the effects of market volatilities on Asm Pacific and Tokyo Electron 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 Tokyo Electron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asm Pacific and Tokyo Electron.
Diversification Opportunities for Asm Pacific and Tokyo Electron
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Asm and Tokyo is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Asm Pacific Technology and Tokyo Electron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokyo Electron 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 Tokyo Electron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokyo Electron has no effect on the direction of Asm Pacific i.e., Asm Pacific and Tokyo Electron go up and down completely randomly.
Pair Corralation between Asm Pacific and Tokyo Electron
Assuming the 90 days horizon Asm Pacific Technology is expected to under-perform the Tokyo Electron. But the pink sheet apears to be less risky and, when comparing its historical volatility, Asm Pacific Technology is 1.56 times less risky than Tokyo Electron. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Tokyo Electron is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 18,391 in Tokyo Electron on October 22, 2024 and sell it today you would lose (1,627) from holding Tokyo Electron or give up 8.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asm Pacific Technology vs. Tokyo Electron
Performance |
| Timeline |
| Asm Pacific Technology |
| Tokyo Electron |
Asm Pacific and Tokyo Electron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asm Pacific and Tokyo Electron
The main advantage of trading using opposite Asm Pacific and Tokyo Electron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asm Pacific position performs unexpectedly, Tokyo Electron 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 Tokyo Electron will offset losses from the drop in Tokyo Electron's long position.| Asm Pacific vs. Disco Corp ADR | Asm Pacific vs. Tokyo Electron | Asm Pacific vs. Lasertec | Asm Pacific vs. Sumco Corp ADR |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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