Correlation Between Twitter and ASM Pacific
Can any of the company-specific risk be diversified away by investing in both Twitter 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 Twitter and ASM Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Twitter and ASM Pacific Technology, you can compare the effects of market volatilities on Twitter 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 Twitter with a short position of ASM Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Twitter and ASM Pacific.
Diversification Opportunities for Twitter and ASM Pacific
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Twitter and ASM is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Twitter 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 Twitter 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 Twitter 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 Twitter i.e., Twitter and ASM Pacific go up and down completely randomly.
Pair Corralation between Twitter and ASM Pacific
If you would invest 1,100 in ASM Pacific Technology on January 26, 2024 and sell it today you would earn a total of 198.00 from holding ASM Pacific Technology or generate 18.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 4.76% |
Values | Daily Returns |
Twitter vs. ASM Pacific Technology
Performance |
Timeline |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ASM Pacific Technology |
Twitter and ASM Pacific Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Twitter and ASM Pacific
The main advantage of trading using opposite Twitter and ASM Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Twitter 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.Twitter vs. Mid Atlantic Home Health | Twitter vs. Planet Fitness | Twitter vs. JBG SMITH Properties | Twitter vs. Bassett Furniture Industries |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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