Correlation Between Asm Pacific and Guerrilla

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

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

Diversification Opportunities for Asm Pacific and Guerrilla

0.59

Correlation Coefficient

Asm Pacific  Guerrilla

Very weak diversification

The 3 months correlation between Asm and Guerrilla is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Asm Pacific Technology and Guerrilla RF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guerrilla RF and Asm Pacific 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 Asm Pacific Technology are associated (or correlated) with Guerrilla. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guerrilla RF has no effect on the direction of Asm Pacific i.e., Asm Pacific and Guerrilla go up and down completely randomly.

Pair Corralation between Asm Pacific and Guerrilla

Assuming the 90 days horizon Asm Pacific Technology is expected to under-perform the Guerrilla. But the pink sheet apears to be less risky and, when comparing its historical volatility, Asm Pacific Technology is 7.17 times less risky than Guerrilla. The pink sheet trades about -0.25 of its potential returns per unit of risk. The Guerrilla RF is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  120.00  in Guerrilla RF on October 6, 2024 and sell it today you would earn a total of  14.00  from holding Guerrilla RF or generate 11.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Asm Pacific Technology  vs.  Guerrilla RF

Asm Pacific Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asm Pacific Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Guerrilla RF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guerrilla RF has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Asm Pacific and Guerrilla

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

The idea behind Asm Pacific Technology and Guerrilla RF 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.