Correlation Between ASE Industrial and Camtek
Can any of the company-specific risk be diversified away by investing in both ASE Industrial and Camtek 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 Camtek 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 Camtek, you can compare the effects of market volatilities on ASE Industrial and Camtek 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 Camtek. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and Camtek.
Diversification Opportunities for ASE Industrial and Camtek
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ASE and Camtek is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and Camtek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camtek 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 Camtek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camtek has no effect on the direction of ASE Industrial i.e., ASE Industrial and Camtek go up and down completely randomly.
Pair Corralation between ASE Industrial and Camtek
Considering the 90-day investment horizon ASE Industrial Holding is expected to generate 0.99 times more return on investment than Camtek. However, ASE Industrial Holding is 1.01 times less risky than Camtek. It trades about 0.0 of its potential returns per unit of risk. Camtek is currently generating about -0.35 per unit of risk. If you would invest 1,012 in ASE Industrial Holding on December 9, 2024 and sell it today you would lose (7.00) from holding ASE Industrial Holding or give up 0.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASE Industrial Holding vs. Camtek
Performance |
| Timeline |
| ASE Industrial Holding |
| Camtek |
ASE Industrial and Camtek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASE Industrial and Camtek
The main advantage of trading using opposite ASE Industrial and Camtek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial position performs unexpectedly, Camtek 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 Camtek will offset losses from the drop in Camtek's long position.| ASE Industrial vs. United Microelectronics | ||
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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