Correlation Between ASE Industrial and Hawkins
Can any of the company-specific risk be diversified away by investing in both ASE Industrial and Hawkins 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 Hawkins 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 Hawkins, you can compare the effects of market volatilities on ASE Industrial and Hawkins 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 Hawkins. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and Hawkins.
Diversification Opportunities for ASE Industrial and Hawkins
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ASE and Hawkins is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and Hawkins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawkins 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 Hawkins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawkins has no effect on the direction of ASE Industrial i.e., ASE Industrial and Hawkins go up and down completely randomly.
Pair Corralation between ASE Industrial and Hawkins
Considering the 90-day investment horizon ASE Industrial Holding is expected to under-perform the Hawkins. But the stock apears to be less risky and, when comparing its historical volatility, ASE Industrial Holding is 1.17 times less risky than Hawkins. The stock trades about -0.01 of its potential returns per unit of risk. The Hawkins is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 8,475 in Hawkins on September 2, 2024 and sell it today you would earn a total of 4,976 from holding Hawkins or generate 58.71% 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. Hawkins
Performance |
| Timeline |
| ASE Industrial Holding |
| Hawkins |
ASE Industrial and Hawkins Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASE Industrial and Hawkins
The main advantage of trading using opposite ASE Industrial and Hawkins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial position performs unexpectedly, Hawkins 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 Hawkins will offset losses from the drop in Hawkins' long position.| ASE Industrial vs. NXP Semiconductors NV | ASE Industrial vs. GSI Technology | ASE Industrial vs. MaxLinear | ASE Industrial vs. Texas Instruments Incorporated |
| Hawkins vs. H B Fuller | Hawkins vs. Minerals Technologies | Hawkins vs. Quaker Chemical | Hawkins vs. Oil Dri |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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