Correlation Between Auto Trader and Asm Pacific

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

By analyzing existing cross correlation between Auto Trader Group and Asm Pacific Technology, you can compare the effects of market volatilities on Auto Trader and Asm Pacific 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 Auto Trader with a short position of Asm Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auto Trader and Asm Pacific.

Diversification Opportunities for Auto Trader and Asm Pacific

-0.19

Correlation Coefficient

Auto Trader  Asm Pacific

Good diversification

The 3 months correlation between Auto and Asm is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Auto Trader Group and Asm Pacific Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asm Pacific Technology and Auto Trader 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 Auto Trader Group are associated (or correlated) with Asm Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asm Pacific Technology has no effect on the direction of Auto Trader i.e., Auto Trader and Asm Pacific go up and down completely randomly.

Pair Corralation between Auto Trader and Asm Pacific

Assuming the 90 days horizon Auto Trader Group is expected to under-perform the Asm Pacific. But the pink sheet apears to be less risky and, when comparing its historical volatility, Auto Trader Group is 1.28 times less risky than Asm Pacific. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Asm Pacific Technology is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  2,060  in Asm Pacific Technology on May 3, 2025 and sell it today you would earn a total of  572.00  from holding Asm Pacific Technology or generate 27.77% return on investment over 90 days.

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

Auto Trader Group  vs.  Asm Pacific Technology

Auto Trader Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Auto Trader Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Auto Trader is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Asm Pacific Technology

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Asm Pacific Technology are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Asm Pacific showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Auto Trader and Asm Pacific

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

The idea behind Auto Trader Group and Asm Pacific Technology 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.