Correlation Between ASE Industrial and Ebang International

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

Diversification Opportunities for ASE Industrial and Ebang International

-0.34

Correlation Coefficient

ASE Industrial  Ebang International

Very good diversification

The 3 months correlation between ASE and Ebang is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and Ebang International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebang International 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 Ebang International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ebang International has no effect on the direction of ASE Industrial i.e., ASE Industrial and Ebang International go up and down completely randomly.

Pair Corralation between ASE Industrial and Ebang International

Considering the 90-day investment horizon ASE Industrial Holding is expected to generate 0.83 times more return on investment than Ebang International. However, ASE Industrial Holding is 1.2 times less risky than Ebang International. It trades about -0.04 of its potential returns per unit of risk. Ebang International Holdings is currently generating about -0.26 per unit of risk. If you would invest  1,064  in ASE Industrial Holding on December 5, 2024 and sell it today you would lose (66.00) from holding ASE Industrial Holding or give up 6.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.5%
Values	Daily Returns

ASE Industrial Holding  vs.  Ebang International Holdings

ASE Industrial Holding

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ASE Industrial Holding are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, ASE Industrial is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Ebang International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ebang International Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating 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 ASE Industrial and Ebang International

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

The idea behind ASE Industrial Holding and Ebang International Holdings 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.