Correlation Between ASE Industrial and CXApp
Can any of the company-specific risk be diversified away by investing in both ASE Industrial and CXApp 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 CXApp 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 CXApp Inc, you can compare the effects of market volatilities on ASE Industrial and CXApp 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 CXApp. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and CXApp.
Diversification Opportunities for ASE Industrial and CXApp
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ASE and CXApp is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and CXApp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CXApp Inc 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 CXApp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CXApp Inc has no effect on the direction of ASE Industrial i.e., ASE Industrial and CXApp go up and down completely randomly.
Pair Corralation between ASE Industrial and CXApp
Considering the 90-day investment horizon ASE Industrial is expected to generate 7.71 times less return on investment than CXApp. But when comparing it to its historical volatility, ASE Industrial Holding is 7.03 times less risky than CXApp. It trades about 0.05 of its potential returns per unit of risk. CXApp Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 47.00 in CXApp Inc on September 12, 2024 and sell it today you would lose (25.00) from holding CXApp Inc or give up 53.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.43% |
| Values | Daily Returns |
ASE Industrial Holding vs. CXApp Inc
Performance |
| Timeline |
| ASE Industrial Holding |
| CXApp Inc |
ASE Industrial and CXApp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASE Industrial and CXApp
The main advantage of trading using opposite ASE Industrial and CXApp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial position performs unexpectedly, CXApp 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 CXApp will offset losses from the drop in CXApp's long position.| ASE Industrial vs. NVIDIA | ASE Industrial vs. Taiwan Semiconductor Manufacturing | ASE Industrial vs. Micron Technology | ASE Industrial vs. Qualcomm Incorporated |
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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