Correlation Between ASE Industrial and BOS Better
Can any of the company-specific risk be diversified away by investing in both ASE Industrial and BOS Better 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 BOS Better 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 BOS Better Online, you can compare the effects of market volatilities on ASE Industrial and BOS Better 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 BOS Better. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and BOS Better.
Diversification Opportunities for ASE Industrial and BOS Better
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ASE and BOS is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and BOS Better Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOS Better Online 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 BOS Better. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOS Better Online has no effect on the direction of ASE Industrial i.e., ASE Industrial and BOS Better go up and down completely randomly.
Pair Corralation between ASE Industrial and BOS Better
Considering the 90-day investment horizon ASE Industrial is expected to generate 1.75 times less return on investment than BOS Better. In addition to that, ASE Industrial is 1.31 times more volatile than BOS Better Online. It trades about 0.15 of its total potential returns per unit of risk. BOS Better Online is currently generating about 0.34 per unit of volatility. If you would invest 312.00 in BOS Better Online on September 13, 2024 and sell it today you would earn a total of 32.00 from holding BOS Better Online or generate 10.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
ASE Industrial Holding vs. BOS Better Online
Performance |
| Timeline |
| ASE Industrial Holding |
| BOS Better Online |
ASE Industrial and BOS Better Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASE Industrial and BOS Better
The main advantage of trading using opposite ASE Industrial and BOS Better positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial position performs unexpectedly, BOS Better 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 BOS Better will offset losses from the drop in BOS Better's long position.| ASE Industrial vs. United Microelectronics | ASE Industrial vs. Amkor Technology | ASE Industrial vs. Himax Technologies | ASE Industrial vs. Chunghwa Telecom Co |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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