Correlation Between Asm Pacific and SCREEN Holdings

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

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

Diversification Opportunities for Asm Pacific and SCREEN Holdings

0.39

Correlation Coefficient

Asm Pacific  SCREEN Holdings

Weak diversification

The 3 months correlation between Asm and SCREEN is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Asm Pacific Technology and SCREEN Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCREEN Holdings and Asm Pacific 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 Asm Pacific Technology are associated (or correlated) with SCREEN Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCREEN Holdings has no effect on the direction of Asm Pacific i.e., Asm Pacific and SCREEN Holdings go up and down completely randomly.

Pair Corralation between Asm Pacific and SCREEN Holdings

Assuming the 90 days horizon Asm Pacific Technology is expected to generate 0.67 times more return on investment than SCREEN Holdings. However, Asm Pacific Technology is 1.48 times less risky than SCREEN Holdings. It trades about -0.06 of its potential returns per unit of risk. SCREEN Holdings Co is currently generating about -0.26 per unit of risk. If you would invest  3,405  in Asm Pacific Technology on September 2, 2024 and sell it today you would lose (386.00) from holding Asm Pacific Technology or give up 11.34% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	21.88%
Values	Daily Returns

Asm Pacific Technology  vs.  SCREEN Holdings Co

Asm Pacific Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asm Pacific Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile 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.

SCREEN Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SCREEN Holdings Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Asm Pacific and SCREEN Holdings

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

The idea behind Asm Pacific Technology and SCREEN Holdings Co 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.