Correlation Between ASICS and On Holding

Can any of the company-specific risk be diversified away by investing in both ASICS and On Holding 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 ASICS and On Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ASICS and On Holding, you can compare the effects of market volatilities on ASICS and On Holding 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 ASICS with a short position of On Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASICS and On Holding.

Diversification Opportunities for ASICS and On Holding

-0.04

Correlation Coefficient

ASICS  On Holding

Good diversification

The 3 months correlation between ASICS and ONON is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding ASICS and On Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on On Holding and ASICS 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 ASICS are associated (or correlated) with On Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of On Holding has no effect on the direction of ASICS i.e., ASICS and On Holding go up and down completely randomly.

Pair Corralation between ASICS and On Holding

Assuming the 90 days horizon ASICS is expected to generate 1.91 times more return on investment than On Holding. However, ASICS is 1.91 times more volatile than On Holding. It trades about 0.06 of its potential returns per unit of risk. On Holding is currently generating about -0.09 per unit of risk. If you would invest  1,976  in ASICS on December 28, 2024 and sell it today you would earn a total of  224.00  from holding ASICS or generate 11.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.67%
Values	Daily Returns

ASICS  vs.  On Holding

ASICS

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ASICS are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal fundamental indicators, ASICS reported solid returns over the last few months and may actually be approaching a breakup point.

On Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days On Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with ASICS and On Holding

The main advantage of trading using opposite ASICS and On Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASICS position performs unexpectedly, On Holding 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 On Holding will offset losses from the drop in On Holding's long position.

The idea behind ASICS and On Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..