Correlation Between Lasertec and Asm Pacific
Can any of the company-specific risk be diversified away by investing in both Lasertec and Asm Pacific 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 Lasertec and Asm Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lasertec and Asm Pacific Technology, you can compare the effects of market volatilities on Lasertec and Asm Pacific 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 Lasertec with a short position of Asm Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lasertec and Asm Pacific.
Diversification Opportunities for Lasertec and Asm Pacific
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lasertec and Asm is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Lasertec and Asm Pacific Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asm Pacific Technology and Lasertec 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 Lasertec are associated (or correlated) with Asm Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asm Pacific Technology has no effect on the direction of Lasertec i.e., Lasertec and Asm Pacific go up and down completely randomly.
Pair Corralation between Lasertec and Asm Pacific
Assuming the 90 days horizon Lasertec is expected to generate 2.12 times less return on investment than Asm Pacific. But when comparing it to its historical volatility, Lasertec is 8.45 times less risky than Asm Pacific. It trades about 0.17 of its potential returns per unit of risk. Asm Pacific Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,937 in Asm Pacific Technology on October 22, 2024 and sell it today you would earn a total of 40.00 from holding Asm Pacific Technology or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Lasertec vs. Asm Pacific Technology
Performance |
| Timeline |
| Lasertec |
| Asm Pacific Technology |
Lasertec and Asm Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lasertec and Asm Pacific
The main advantage of trading using opposite Lasertec and Asm Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lasertec position performs unexpectedly, Asm Pacific 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 Asm Pacific will offset losses from the drop in Asm Pacific's long position.| Lasertec vs. Sumco Corp ADR | Lasertec vs. Asm Pacific Technology | Lasertec vs. Disco Corp ADR | Lasertec vs. Tokyo Electron |
| Asm Pacific vs. Disco Corp ADR | Asm Pacific vs. Tokyo Electron | Asm Pacific vs. Lasertec | Asm Pacific vs. Sumco Corp ADR |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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