Correlation Between ASE Industrial and Semtech
Can any of the company-specific risk be diversified away by investing in both ASE Industrial and Semtech 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 Semtech 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 Semtech, you can compare the effects of market volatilities on ASE Industrial and Semtech 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 Semtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and Semtech.
Diversification Opportunities for ASE Industrial and Semtech
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ASE and Semtech is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and Semtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semtech 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 Semtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semtech has no effect on the direction of ASE Industrial i.e., ASE Industrial and Semtech go up and down completely randomly.
Pair Corralation between ASE Industrial and Semtech
Considering the 90-day investment horizon ASE Industrial is expected to generate 7.75 times less return on investment than Semtech. But when comparing it to its historical volatility, ASE Industrial Holding is 1.85 times less risky than Semtech. It trades about 0.03 of its potential returns per unit of risk. Semtech is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,983 in Semtech on November 3, 2024 and sell it today you would earn a total of 4,713 from holding Semtech or generate 237.67% 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. Semtech
Performance |
| Timeline |
| ASE Industrial Holding |
| Semtech |
ASE Industrial and Semtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASE Industrial and Semtech
The main advantage of trading using opposite ASE Industrial and Semtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial position performs unexpectedly, Semtech 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 Semtech will offset losses from the drop in Semtech's long position.| ASE Industrial vs. First Solar | ASE Industrial vs. Sunrun Inc | ASE Industrial vs. Canadian Solar | ASE Industrial vs. SolarEdge Technologies |
| Semtech vs. Power Integrations | Semtech vs. Diodes Incorporated | Semtech vs. MACOM Technology Solutions | Semtech vs. Cirrus Logic |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |