Correlation Between ASE Industrial and Global Lights
Can any of the company-specific risk be diversified away by investing in both ASE Industrial and Global Lights 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 Global Lights 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 Global Lights Acquisition, you can compare the effects of market volatilities on ASE Industrial and Global Lights 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 Global Lights. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and Global Lights.
Diversification Opportunities for ASE Industrial and Global Lights
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ASE and Global is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and Global Lights Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Lights Acquisition 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 Global Lights. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Lights Acquisition has no effect on the direction of ASE Industrial i.e., ASE Industrial and Global Lights go up and down completely randomly.
Pair Corralation between ASE Industrial and Global Lights
Considering the 90-day investment horizon ASE Industrial Holding is expected to generate 21.32 times more return on investment than Global Lights. However, ASE Industrial is 21.32 times more volatile than Global Lights Acquisition. It trades about 0.05 of its potential returns per unit of risk. Global Lights Acquisition is currently generating about 0.3 per unit of risk. If you would invest 961.00 in ASE Industrial Holding on November 2, 2024 and sell it today you would earn a total of 47.00 from holding ASE Industrial Holding or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASE Industrial Holding vs. Global Lights Acquisition
Performance |
| Timeline |
| ASE Industrial Holding |
| Global Lights Acquisition |
ASE Industrial and Global Lights Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASE Industrial and Global Lights
The main advantage of trading using opposite ASE Industrial and Global Lights positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial position performs unexpectedly, Global Lights 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 Global Lights will offset losses from the drop in Global Lights' long position.| ASE Industrial vs. United Microelectronics | ASE Industrial vs. Amkor Technology | ASE Industrial vs. Himax Technologies | ASE Industrial vs. Chunghwa Telecom Co |
| Global Lights vs. Fomento Economico Mexicano | Global Lights vs. Alvotech | Global Lights vs. Definitive Healthcare Corp | Global Lights vs. Compania Cervecerias Unidas |
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 Stocks Directory module to find actively traded stocks across global markets.
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