Correlation Between ASM Pacific and Casio Computer
Can any of the company-specific risk be diversified away by investing in both ASM Pacific and Casio Computer 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 ASM Pacific and Casio Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASM Pacific Technology and Casio Computer CoLtd, you can compare the effects of market volatilities on ASM Pacific and Casio Computer 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 ASM Pacific with a short position of Casio Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASM Pacific and Casio Computer.
Diversification Opportunities for ASM Pacific and Casio Computer
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ASM and Casio is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding ASM Pacific Technology and Casio Computer CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Casio Computer CoLtd and ASM Pacific 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 ASM Pacific Technology are associated (or correlated) with Casio Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Casio Computer CoLtd has no effect on the direction of ASM Pacific i.e., ASM Pacific and Casio Computer go up and down completely randomly.
Pair Corralation between ASM Pacific and Casio Computer
Assuming the 90 days trading horizon ASM Pacific Technology is expected to generate 2.48 times more return on investment than Casio Computer. However, ASM Pacific is 2.48 times more volatile than Casio Computer CoLtd. It trades about 0.01 of its potential returns per unit of risk. Casio Computer CoLtd is currently generating about 0.01 per unit of risk. If you would invest 931.00 in ASM Pacific Technology on November 3, 2024 and sell it today you would lose (96.00) from holding ASM Pacific Technology or give up 10.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASM Pacific Technology vs. Casio Computer CoLtd
Performance |
| Timeline |
| ASM Pacific Technology |
| Casio Computer CoLtd |
ASM Pacific and Casio Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASM Pacific and Casio Computer
The main advantage of trading using opposite ASM Pacific and Casio Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASM Pacific position performs unexpectedly, Casio Computer 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 Casio Computer will offset losses from the drop in Casio Computer's long position.| ASM Pacific vs. Safety Insurance Group | ASM Pacific vs. Direct Line Insurance | ASM Pacific vs. REVO INSURANCE SPA | ASM Pacific vs. NURAN WIRELESS INC |
| Casio Computer vs. Yuexiu Transport Infrastructure | Casio Computer vs. Medical Properties Trust | Casio Computer vs. Aluminum of | Casio Computer vs. Merit Medical Systems |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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