Correlation Between ASE Industrial and GCT Semiconductor
Can any of the company-specific risk be diversified away by investing in both ASE Industrial and GCT Semiconductor 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 GCT Semiconductor 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 GCT Semiconductor Holding, you can compare the effects of market volatilities on ASE Industrial and GCT Semiconductor 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 GCT Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and GCT Semiconductor.
Diversification Opportunities for ASE Industrial and GCT Semiconductor
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between ASE and GCT is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and GCT Semiconductor Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GCT Semiconductor Holding 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 GCT Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GCT Semiconductor Holding has no effect on the direction of ASE Industrial i.e., ASE Industrial and GCT Semiconductor go up and down completely randomly.
Pair Corralation between ASE Industrial and GCT Semiconductor
Considering the 90-day investment horizon ASE Industrial Holding is expected to generate 0.36 times more return on investment than GCT Semiconductor. However, ASE Industrial Holding is 2.79 times less risky than GCT Semiconductor. It trades about 0.11 of its potential returns per unit of risk. GCT Semiconductor Holding is currently generating about 0.03 per unit of risk. If you would invest 961.00 in ASE Industrial Holding on September 4, 2024 and sell it today you would earn a total of 40.00 from holding ASE Industrial Holding or generate 4.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
ASE Industrial Holding vs. GCT Semiconductor Holding
Performance |
| Timeline |
| ASE Industrial Holding |
| GCT Semiconductor Holding |
ASE Industrial and GCT Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASE Industrial and GCT Semiconductor
The main advantage of trading using opposite ASE Industrial and GCT Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial position performs unexpectedly, GCT Semiconductor 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 GCT Semiconductor will offset losses from the drop in GCT Semiconductor's long position.| ASE Industrial vs. United Microelectronics | ASE Industrial vs. Amkor Technology | ASE Industrial vs. Himax Technologies | ASE Industrial vs. Chunghwa Telecom Co |
| GCT Semiconductor vs. Taiwan Semiconductor Manufacturing | GCT Semiconductor vs. MACOM Technology Solutions | GCT Semiconductor vs. Everspin Technologies | GCT Semiconductor vs. National Vision Holdings |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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