Correlation Between ASE Industrial and China Tontine

Can any of the company-specific risk be diversified away by investing in both ASE Industrial and China Tontine 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 China Tontine 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 China Tontine Wines, you can compare the effects of market volatilities on ASE Industrial and China Tontine 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 China Tontine. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and China Tontine.

Diversification Opportunities for ASE Industrial and China Tontine

0.0

Correlation Coefficient

ASE Industrial  China Tontine

Pay attention - limited upside

The 3 months correlation between ASE and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and China Tontine Wines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Tontine Wines 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 China Tontine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Tontine Wines has no effect on the direction of ASE Industrial i.e., ASE Industrial and China Tontine go up and down completely randomly.

Pair Corralation between ASE Industrial and China Tontine

If you would invest  876.00  in ASE Industrial Holding on September 5, 2024 and sell it today you would earn a total of  115.00  from holding ASE Industrial Holding or generate 13.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ASE Industrial Holding  vs.  China Tontine Wines

ASE Industrial Holding

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ASE Industrial Holding are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, ASE Industrial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

China Tontine Wines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days China Tontine Wines has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, China Tontine is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ASE Industrial and China Tontine

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

The idea behind ASE Industrial Holding and China Tontine Wines 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.