Correlation Between ASE Industrial and SemiLEDS

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

Diversification Opportunities for ASE Industrial and SemiLEDS

0.57

Correlation Coefficient

ASE Industrial  SemiLEDS

Very weak diversification

The 3 months correlation between ASE and SemiLEDS is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and SemiLEDS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SemiLEDS 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 SemiLEDS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SemiLEDS has no effect on the direction of ASE Industrial i.e., ASE Industrial and SemiLEDS go up and down completely randomly.

Pair Corralation between ASE Industrial and SemiLEDS

Considering the 90-day investment horizon ASE Industrial Holding is expected to generate 0.36 times more return on investment than SemiLEDS. However, ASE Industrial Holding is 2.79 times less risky than SemiLEDS. It trades about 0.27 of its potential returns per unit of risk. SemiLEDS is currently generating about 0.01 per unit of risk. If you would invest  787.00  in ASE Industrial Holding on April 22, 2025 and sell it today you would earn a total of  265.00  from holding ASE Industrial Holding or generate 33.67% return on investment over 90 days.

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

ASE Industrial Holding  vs.  SemiLEDS

ASE Industrial Holding

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ASE Industrial Holding are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, ASE Industrial showed solid returns over the last few months and may actually be approaching a breakup point.

SemiLEDS

Risk-Adjusted Performance

Very Weak

Over the last 90 days SemiLEDS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, SemiLEDS is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ASE Industrial and SemiLEDS

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

The idea behind ASE Industrial Holding and SemiLEDS 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.