Correlation Between NVIDIA and ASE Industrial

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

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

Diversification Opportunities for NVIDIA and ASE Industrial

0.79

Correlation Coefficient

NVIDIA  ASE Industrial

Poor diversification

The 3 months correlation between NVIDIA and ASE is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and ASE Industrial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASE Industrial Holding and NVIDIA 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 NVIDIA are associated (or correlated) with ASE Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASE Industrial Holding has no effect on the direction of NVIDIA i.e., NVIDIA and ASE Industrial go up and down completely randomly.

Pair Corralation between NVIDIA and ASE Industrial

Given the investment horizon of 90 days NVIDIA is expected to under-perform the ASE Industrial. In addition to that, NVIDIA is 1.57 times more volatile than ASE Industrial Holding. It trades about -0.05 of its total potential returns per unit of risk. ASE Industrial Holding is currently generating about -0.04 per unit of volatility. If you would invest  1,034  in ASE Industrial Holding on December 27, 2024 and sell it today you would lose (84.00) from holding ASE Industrial Holding or give up 8.12% of portfolio value over 90 days.

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

NVIDIA  vs.  ASE Industrial Holding

NVIDIA

Risk-Adjusted Performance

Very Weak

Over the last 90 days NVIDIA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

ASE Industrial Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days ASE Industrial Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with NVIDIA and ASE Industrial

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

The idea behind NVIDIA and ASE Industrial 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.