Correlation Between ASE Industrial and Global Unichip
Can any of the company-specific risk be diversified away by investing in both ASE Industrial and Global Unichip 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 Global Unichip 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 Global Unichip Corp, you can compare the effects of market volatilities on ASE Industrial and Global Unichip 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 Global Unichip. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and Global Unichip.
Diversification Opportunities for ASE Industrial and Global Unichip
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ASE and Global is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and Global Unichip Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Unichip Corp 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 Global Unichip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Unichip Corp has no effect on the direction of ASE Industrial i.e., ASE Industrial and Global Unichip go up and down completely randomly.
Pair Corralation between ASE Industrial and Global Unichip
Assuming the 90 days trading horizon ASE Industrial Holding is expected to generate 0.81 times more return on investment than Global Unichip. However, ASE Industrial Holding is 1.23 times less risky than Global Unichip. It trades about -0.05 of its potential returns per unit of risk. Global Unichip Corp is currently generating about -0.07 per unit of risk. If you would invest 16,350 in ASE Industrial Holding on December 29, 2024 and sell it today you would lose (1,300) from holding ASE Industrial Holding or give up 7.95% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
ASE Industrial Holding vs. Global Unichip Corp
Performance |
Timeline |
ASE Industrial Holding |
Global Unichip Corp |
ASE Industrial and Global Unichip Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ASE Industrial and Global Unichip
The main advantage of trading using opposite ASE Industrial and Global Unichip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial position performs unexpectedly, Global Unichip 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 Global Unichip will offset losses from the drop in Global Unichip's long position.ASE Industrial vs. Delta Electronics | ASE Industrial vs. Novatek Microelectronics Corp | ASE Industrial vs. United Microelectronics | ASE Industrial vs. LARGAN Precision Co |
Global Unichip vs. Alchip Technologies | Global Unichip vs. Realtek Semiconductor Corp | Global Unichip vs. Faraday Technology Corp | Global Unichip vs. Novatek Microelectronics Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |