Correlation Between ASE Industrial and Broadleaf
Can any of the company-specific risk be diversified away by investing in both ASE Industrial and Broadleaf 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 Broadleaf 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 Broadleaf Co, you can compare the effects of market volatilities on ASE Industrial and Broadleaf 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 Broadleaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and Broadleaf.
Diversification Opportunities for ASE Industrial and Broadleaf
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ASE and Broadleaf is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and Broadleaf Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadleaf 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 Broadleaf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadleaf has no effect on the direction of ASE Industrial i.e., ASE Industrial and Broadleaf go up and down completely randomly.
Pair Corralation between ASE Industrial and Broadleaf
If you would invest 1,002 in ASE Industrial Holding on November 2, 2024 and sell it today you would earn a total of 35.50 from holding ASE Industrial Holding or generate 3.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASE Industrial Holding vs. Broadleaf Co
Performance |
| Timeline |
| ASE Industrial Holding |
| Broadleaf |
ASE Industrial and Broadleaf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASE Industrial and Broadleaf
The main advantage of trading using opposite ASE Industrial and Broadleaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial position performs unexpectedly, Broadleaf 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 Broadleaf will offset losses from the drop in Broadleaf's long position.| ASE Industrial vs. United Microelectronics | ASE Industrial vs. Amkor Technology | ASE Industrial vs. Himax Technologies | ASE Industrial vs. Chunghwa Telecom Co |
| Broadleaf vs. NextPlat Corp | Broadleaf vs. Liquid Avatar Technologies | Broadleaf vs. Wirecard AG | Broadleaf vs. Waldencast Acquisition Corp |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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