Correlation Between ASE Industrial and Tootsie Roll
Can any of the company-specific risk be diversified away by investing in both ASE Industrial and Tootsie Roll 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 Tootsie Roll 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 Tootsie Roll Industries, you can compare the effects of market volatilities on ASE Industrial and Tootsie Roll 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 Tootsie Roll. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and Tootsie Roll.
Diversification Opportunities for ASE Industrial and Tootsie Roll
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ASE and Tootsie is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and Tootsie Roll Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tootsie Roll Industries 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 Tootsie Roll. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tootsie Roll Industries has no effect on the direction of ASE Industrial i.e., ASE Industrial and Tootsie Roll go up and down completely randomly.
Pair Corralation between ASE Industrial and Tootsie Roll
Considering the 90-day investment horizon ASE Industrial Holding is expected to under-perform the Tootsie Roll. In addition to that, ASE Industrial is 1.83 times more volatile than Tootsie Roll Industries. It trades about -0.37 of its total potential returns per unit of risk. Tootsie Roll Industries is currently generating about -0.04 per unit of volatility. If you would invest 3,118 in Tootsie Roll Industries on January 5, 2025 and sell it today you would lose (59.00) from holding Tootsie Roll Industries or give up 1.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASE Industrial Holding vs. Tootsie Roll Industries
Performance |
| Timeline |
| ASE Industrial Holding |
| Tootsie Roll Industries |
ASE Industrial and Tootsie Roll Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASE Industrial and Tootsie Roll
The main advantage of trading using opposite ASE Industrial and Tootsie Roll positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial position performs unexpectedly, Tootsie Roll 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 Tootsie Roll will offset losses from the drop in Tootsie Roll's long position.| ASE Industrial vs. United Microelectronics | ASE Industrial vs. Amkor Technology | ASE Industrial vs. Himax Technologies | ASE Industrial vs. Chunghwa Telecom Co |
| Tootsie Roll vs. Mondelez International | Tootsie Roll vs. Hershey Co | Tootsie Roll vs. Rocky Mountain Chocolate | Tootsie Roll vs. Chocoladefabriken Lindt Sprngli |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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