Correlation Between Diodes Incorporated and ASE Industrial
Can any of the company-specific risk be diversified away by investing in both Diodes Incorporated 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 Diodes Incorporated and ASE Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diodes Incorporated and ASE Industrial Holding, you can compare the effects of market volatilities on Diodes Incorporated 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 Diodes Incorporated with a short position of ASE Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diodes Incorporated and ASE Industrial.
Diversification Opportunities for Diodes Incorporated and ASE Industrial
-0.24 | Correlation Coefficient |
Very good diversification
The 6 months correlation between Diodes and ASE is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Diodes Incorporated 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 Diodes Incorporated 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 Diodes Incorporated 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 Diodes Incorporated i.e., Diodes Incorporated and ASE Industrial go up and down completely randomly.
Pair Corralation between Diodes Incorporated and ASE Industrial
Given the investment horizon of 90 days Diodes Incorporated is expected to under-perform the ASE Industrial. In addition to that, Diodes Incorporated is 1.25 times more volatile than ASE Industrial Holding. It trades about -0.01 of its total potential returns per unit of risk. ASE Industrial Holding is currently generating about 0.14 per unit of volatility. If you would invest 763.00 in ASE Industrial Holding on January 19, 2024 and sell it today you would earn a total of 296.00 from holding ASE Industrial Holding or generate 38.79% return on investment over 90 days.
| Time Period | 6 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diodes Incorporated vs. ASE Industrial Holding
Performance |
| Timeline |
| Diodes Incorporated |
| ASE Industrial Holding |
Diodes Incorporated and ASE Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diodes Incorporated and ASE Industrial
The main advantage of trading using opposite Diodes Incorporated and ASE Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diodes Incorporated 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.| Diodes Incorporated vs. Silicon Laboratories | Diodes Incorporated vs. MACOM Technology Solutions | Diodes Incorporated vs. FormFactor | Diodes Incorporated vs. Amkor Technology |
| ASE Industrial vs. United Microelectronics | ASE Industrial vs. Amkor Technology | ASE Industrial vs. Himax Technologies | ASE Industrial vs. Chunghwa Telecom Co |
Check out your portfolio center.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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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