Correlation Between Hawkins and ASE Industrial
Can any of the company-specific risk be diversified away by investing in both Hawkins and ASE Industrial 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 Hawkins and ASE Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawkins and ASE Industrial Holding, you can compare the effects of market volatilities on Hawkins and ASE Industrial 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 Hawkins with a short position of ASE Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawkins and ASE Industrial.
Diversification Opportunities for Hawkins and ASE Industrial
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hawkins and ASE is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Hawkins and ASE Industrial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASE Industrial Holding and Hawkins 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 Hawkins are associated (or correlated) with ASE Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASE Industrial Holding has no effect on the direction of Hawkins i.e., Hawkins and ASE Industrial go up and down completely randomly.
Pair Corralation between Hawkins and ASE Industrial
Given the investment horizon of 90 days Hawkins is expected to generate 1.17 times more return on investment than ASE Industrial. However, Hawkins is 1.17 times more volatile than ASE Industrial Holding. It trades about 0.15 of its potential returns per unit of risk. ASE Industrial Holding is currently generating about -0.01 per unit of risk. If you would invest 8,475 in Hawkins on September 2, 2024 and sell it today you would earn a total of 4,976 from holding Hawkins or generate 58.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hawkins vs. ASE Industrial Holding
Performance |
| Timeline |
| Hawkins |
| ASE Industrial Holding |
Hawkins and ASE Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawkins and ASE Industrial
The main advantage of trading using opposite Hawkins and ASE Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawkins position performs unexpectedly, ASE Industrial 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 ASE Industrial will offset losses from the drop in ASE Industrial's long position.| Hawkins vs. H B Fuller | Hawkins vs. Minerals Technologies | Hawkins vs. Quaker Chemical | Hawkins vs. Oil Dri |
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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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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