Correlation Between ASE Industrial and Sandstorm Gold
Can any of the company-specific risk be diversified away by investing in both ASE Industrial and Sandstorm Gold 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 Sandstorm Gold 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 Sandstorm Gold Ltd, you can compare the effects of market volatilities on ASE Industrial and Sandstorm Gold 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 Sandstorm Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and Sandstorm Gold.
Diversification Opportunities for ASE Industrial and Sandstorm Gold
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ASE and Sandstorm is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and Sandstorm Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandstorm Gold 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 Sandstorm Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandstorm Gold has no effect on the direction of ASE Industrial i.e., ASE Industrial and Sandstorm Gold go up and down completely randomly.
Pair Corralation between ASE Industrial and Sandstorm Gold
Considering the 90-day investment horizon ASE Industrial Holding is expected to generate 0.66 times more return on investment than Sandstorm Gold. However, ASE Industrial Holding is 1.52 times less risky than Sandstorm Gold. It trades about -0.03 of its potential returns per unit of risk. Sandstorm Gold Ltd is currently generating about -0.07 per unit of risk. If you would invest 988.00 in ASE Industrial Holding on September 2, 2024 and sell it today you would lose (16.00) from holding ASE Industrial Holding or give up 1.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASE Industrial Holding vs. Sandstorm Gold Ltd
Performance |
| Timeline |
| ASE Industrial Holding |
| Sandstorm Gold |
ASE Industrial and Sandstorm Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASE Industrial and Sandstorm Gold
The main advantage of trading using opposite ASE Industrial and Sandstorm Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial position performs unexpectedly, Sandstorm Gold 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 Sandstorm Gold will offset losses from the drop in Sandstorm Gold's long position.| ASE Industrial vs. NXP Semiconductors NV | ASE Industrial vs. GSI Technology | ASE Industrial vs. MaxLinear | ASE Industrial vs. Texas Instruments Incorporated |
| Sandstorm Gold vs. Fortitude Gold Corp | Sandstorm Gold vs. New Gold | Sandstorm Gold vs. Galiano Gold | Sandstorm Gold vs. GoldMining |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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