Correlation Between ASE Industrial and 12612WAB0

Can any of the company-specific risk be diversified away by investing in both ASE Industrial and 12612WAB0 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 12612WAB0 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 Con way 67 percent, you can compare the effects of market volatilities on ASE Industrial and 12612WAB0 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 12612WAB0. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and 12612WAB0.

Diversification Opportunities for ASE Industrial and 12612WAB0

-0.52

Correlation Coefficient

ASE Industrial  12612WAB0

Excellent diversification

The 3 months correlation between ASE and 12612WAB0 is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and Con way 67 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Con way 67 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 12612WAB0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Con way 67 has no effect on the direction of ASE Industrial i.e., ASE Industrial and 12612WAB0 go up and down completely randomly.

Pair Corralation between ASE Industrial and 12612WAB0

Considering the 90-day investment horizon ASE Industrial Holding is expected to generate 5.66 times more return on investment than 12612WAB0. However, ASE Industrial is 5.66 times more volatile than Con way 67 percent. It trades about 0.02 of its potential returns per unit of risk. Con way 67 percent is currently generating about -0.11 per unit of risk. If you would invest  1,001  in ASE Industrial Holding on December 1, 2024 and sell it today you would earn a total of  12.00  from holding ASE Industrial Holding or generate 1.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

ASE Industrial Holding  vs.  Con way 67 percent

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.

Con way 67

Risk-Adjusted Performance

Very Weak

Over the last 90 days Con way 67 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 12612WAB0 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ASE Industrial and 12612WAB0

The main advantage of trading using opposite ASE Industrial and 12612WAB0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial position performs unexpectedly, 12612WAB0 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 12612WAB0 will offset losses from the drop in 12612WAB0's long position.

The idea behind ASE Industrial Holding and Con way 67 percent 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.