Correlation Between ASE Industrial and Universal Music
Can any of the company-specific risk be diversified away by investing in both ASE Industrial and Universal Music 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 Universal Music 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 Universal Music Group, you can compare the effects of market volatilities on ASE Industrial and Universal Music 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 Universal Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and Universal Music.
Diversification Opportunities for ASE Industrial and Universal Music
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ASE and Universal is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and Universal Music Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Music Group 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 Universal Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Music Group has no effect on the direction of ASE Industrial i.e., ASE Industrial and Universal Music go up and down completely randomly.
Pair Corralation between ASE Industrial and Universal Music
Considering the 90-day investment horizon ASE Industrial Holding is expected to generate 1.02 times more return on investment than Universal Music. However, ASE Industrial is 1.02 times more volatile than Universal Music Group. It trades about 0.06 of its potential returns per unit of risk. Universal Music Group is currently generating about -0.04 per unit of risk. If you would invest 911.00 in ASE Industrial Holding on September 3, 2024 and sell it today you would earn a total of 61.00 from holding ASE Industrial Holding or generate 6.7% 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. Universal Music Group
Performance |
| Timeline |
| ASE Industrial Holding |
| Universal Music Group |
ASE Industrial and Universal Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASE Industrial and Universal Music
The main advantage of trading using opposite ASE Industrial and Universal Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial position performs unexpectedly, Universal Music 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 Universal Music will offset losses from the drop in Universal Music's long position.| ASE Industrial vs. United Microelectronics | ASE Industrial vs. Amkor Technology | ASE Industrial vs. Himax Technologies | ASE Industrial vs. Chunghwa Telecom Co |
| Universal Music vs. Thunderbird Entertainment Group | Universal Music vs. Warner Music Group | Universal Music vs. Live Nation Entertainment | Universal Music vs. Atlanta Braves Holdings, |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |