Correlation Between ASE Industrial and Universal Microelectronics
Can any of the company-specific risk be diversified away by investing in both ASE Industrial and Universal Microelectronics 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 Microelectronics 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 Microelectronics Co, you can compare the effects of market volatilities on ASE Industrial and Universal Microelectronics 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 Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and Universal Microelectronics.
Diversification Opportunities for ASE Industrial and Universal Microelectronics
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ASE and Universal is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and Universal Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Microelectronics 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 Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Microelectronics has no effect on the direction of ASE Industrial i.e., ASE Industrial and Universal Microelectronics go up and down completely randomly.
Pair Corralation between ASE Industrial and Universal Microelectronics
Assuming the 90 days trading horizon ASE Industrial Holding is expected to under-perform the Universal Microelectronics. In addition to that, ASE Industrial is 1.25 times more volatile than Universal Microelectronics Co. It trades about -0.05 of its total potential returns per unit of risk. Universal Microelectronics Co is currently generating about -0.01 per unit of volatility. If you would invest 2,565 in Universal Microelectronics Co on December 30, 2024 and sell it today you would lose (65.00) from holding Universal Microelectronics Co or give up 2.53% of portfolio value 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 Microelectronics Co
Performance |
Timeline |
ASE Industrial Holding |
Universal Microelectronics |
ASE Industrial and Universal Microelectronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ASE Industrial and Universal Microelectronics
The main advantage of trading using opposite ASE Industrial and Universal Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial position performs unexpectedly, Universal Microelectronics 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 Microelectronics will offset losses from the drop in Universal Microelectronics' long position.ASE Industrial vs. Delta Electronics | ASE Industrial vs. Novatek Microelectronics Corp | ASE Industrial vs. United Microelectronics | ASE Industrial vs. LARGAN Precision Co |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |