Correlation Between Apple and Asm Pacific
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and Asm Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Asm Pacific Technology, you can compare the effects of market volatilities on Apple 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 Apple with a short position of Asm Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Asm Pacific.
Diversification Opportunities for Apple and Asm Pacific
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apple and Asm is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc 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 Apple 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 Apple Inc 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 Apple i.e., Apple and Asm Pacific go up and down completely randomly.
Pair Corralation between Apple and Asm Pacific
Given the investment horizon of 90 days Apple Inc is expected to generate 0.47 times more return on investment than Asm Pacific. However, Apple Inc is 2.14 times less risky than Asm Pacific. It trades about 0.16 of its potential returns per unit of risk. Asm Pacific Technology is currently generating about 0.03 per unit of risk. If you would invest 16,889 in Apple Inc on March 6, 2024 and sell it today you would earn a total of 2,546 from holding Apple Inc or generate 15.07% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Apple Inc vs. Asm Pacific Technology
Performance |
Timeline |
Apple Inc |
Asm Pacific Technology |
Apple and Asm Pacific Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Apple and Asm Pacific
The main advantage of trading using opposite Apple and Asm Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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 Apple Inc 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.Asm Pacific vs. SCREEN Holdings Co | Asm Pacific vs. Disco Corp ADR | Asm Pacific vs. Tokyo Electron | Asm Pacific vs. Lasertec |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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