Correlation Between ASE Industrial and Himax Technologies
Can any of the company-specific risk be diversified away by investing in both ASE Industrial and Himax Technologies 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 Himax Technologies 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 Himax Technologies, you can compare the effects of market volatilities on ASE Industrial and Himax Technologies 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 Himax Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and Himax Technologies.
Diversification Opportunities for ASE Industrial and Himax Technologies
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ASE and Himax is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and Himax Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Himax Technologies 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 Himax Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Himax Technologies has no effect on the direction of ASE Industrial i.e., ASE Industrial and Himax Technologies go up and down completely randomly.
Pair Corralation between ASE Industrial and Himax Technologies
Considering the 90-day investment horizon ASE Industrial Holding is expected to generate 0.63 times more return on investment than Himax Technologies. However, ASE Industrial Holding is 1.58 times less risky than Himax Technologies. It trades about 0.05 of its potential returns per unit of risk. Himax Technologies is currently generating about 0.03 per unit of risk. If you would invest 668.00 in ASE Industrial Holding on October 21, 2024 and sell it today you would earn a total of 384.00 from holding ASE Industrial Holding or generate 57.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASE Industrial Holding vs. Himax Technologies
Performance |
| Timeline |
| ASE Industrial Holding |
| Himax Technologies |
ASE Industrial and Himax Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASE Industrial and Himax Technologies
The main advantage of trading using opposite ASE Industrial and Himax Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial position performs unexpectedly, Himax Technologies 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 Himax Technologies will offset losses from the drop in Himax Technologies' long position.| ASE Industrial vs. United Microelectronics | ASE Industrial vs. Amkor Technology | ASE Industrial vs. Himax Technologies | ASE Industrial vs. Chunghwa Telecom Co |
| Himax Technologies vs. ASE Industrial Holding | Himax Technologies vs. United Microelectronics | Himax Technologies vs. MaxLinear | Himax Technologies vs. SemiLEDS |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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