Correlation Between ASE Industrial and Eshallgo
Can any of the company-specific risk be diversified away by investing in both ASE Industrial and Eshallgo 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 Eshallgo 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 Eshallgo Class A, you can compare the effects of market volatilities on ASE Industrial and Eshallgo 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 Eshallgo. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and Eshallgo.
Diversification Opportunities for ASE Industrial and Eshallgo
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between ASE and Eshallgo is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and Eshallgo Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eshallgo Class A 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 Eshallgo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eshallgo Class A has no effect on the direction of ASE Industrial i.e., ASE Industrial and Eshallgo go up and down completely randomly.
Pair Corralation between ASE Industrial and Eshallgo
Considering the 90-day investment horizon ASE Industrial Holding is expected to under-perform the Eshallgo. But the stock apears to be less risky and, when comparing its historical volatility, ASE Industrial Holding is 3.89 times less risky than Eshallgo. The stock trades about -0.05 of its potential returns per unit of risk. The Eshallgo Class A is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 211.00 in Eshallgo Class A on August 24, 2024 and sell it today you would earn a total of 188.00 from holding Eshallgo Class A or generate 89.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASE Industrial Holding vs. Eshallgo Class A
Performance |
| Timeline |
| ASE Industrial Holding |
| Eshallgo Class A |
ASE Industrial and Eshallgo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASE Industrial and Eshallgo
The main advantage of trading using opposite ASE Industrial and Eshallgo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial position performs unexpectedly, Eshallgo 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 Eshallgo will offset losses from the drop in Eshallgo's long position.| ASE Industrial vs. Eshallgo Class A | ASE Industrial vs. Amtech Systems | ASE Industrial vs. Gold Fields Ltd | ASE Industrial vs. Aegean Airlines SA |
| Eshallgo vs. Shake Shack | Eshallgo vs. Lululemon Athletica | Eshallgo vs. Playtika Holding Corp | Eshallgo vs. Haverty Furniture Companies |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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