Correlation Between 025816CP2 and ASE Industrial

Can any of the company-specific risk be diversified away by investing in both 025816CP2 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 025816CP2 and ASE Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AXP 33 03 MAY 27 and ASE Industrial Holding, you can compare the effects of market volatilities on 025816CP2 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 025816CP2 with a short position of ASE Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of 025816CP2 and ASE Industrial.

Diversification Opportunities for 025816CP2 and ASE Industrial

-0.05

Correlation Coefficient

025816CP2  ASE Industrial

Good diversification

The 3 months correlation between 025816CP2 and ASE is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding AXP 33 03 MAY 27 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 025816CP2 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 AXP 33 03 MAY 27 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 025816CP2 i.e., 025816CP2 and ASE Industrial go up and down completely randomly.

Pair Corralation between 025816CP2 and ASE Industrial

Assuming the 90 days trading horizon AXP 33 03 MAY 27 is expected to under-perform the ASE Industrial. But the bond apears to be less risky and, when comparing its historical volatility, AXP 33 03 MAY 27 is 3.38 times less risky than ASE Industrial. The bond trades about -0.13 of its potential returns per unit of risk. The ASE Industrial Holding is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  924.00  in ASE Industrial Holding on September 5, 2024 and sell it today you would earn a total of  67.00  from holding ASE Industrial Holding or generate 7.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

AXP 33 03 MAY 27  vs.  ASE Industrial Holding

AXP 33 03

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AXP 33 03 MAY 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 025816CP2 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ASE Industrial Holding

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ASE Industrial Holding are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, ASE Industrial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with 025816CP2 and ASE Industrial

The main advantage of trading using opposite 025816CP2 and ASE Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 025816CP2 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 AXP 33 03 MAY 27 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.