Correlation Between ASM Pacific and PRECISION DRILLING
Can any of the company-specific risk be diversified away by investing in both ASM Pacific and PRECISION DRILLING 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 PRECISION DRILLING 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 PRECISION DRILLING P, you can compare the effects of market volatilities on ASM Pacific and PRECISION DRILLING 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 PRECISION DRILLING. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASM Pacific and PRECISION DRILLING.
Diversification Opportunities for ASM Pacific and PRECISION DRILLING
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ASM and PRECISION is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding ASM Pacific Technology and PRECISION DRILLING P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PRECISION DRILLING 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 PRECISION DRILLING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PRECISION DRILLING has no effect on the direction of ASM Pacific i.e., ASM Pacific and PRECISION DRILLING go up and down completely randomly.
Pair Corralation between ASM Pacific and PRECISION DRILLING
Assuming the 90 days trading horizon ASM Pacific is expected to generate 1.06 times less return on investment than PRECISION DRILLING. In addition to that, ASM Pacific is 1.57 times more volatile than PRECISION DRILLING P. It trades about 0.03 of its total potential returns per unit of risk. PRECISION DRILLING P is currently generating about 0.05 per unit of volatility. If you would invest 4,760 in PRECISION DRILLING P on August 29, 2025 and sell it today you would earn a total of 220.00 from holding PRECISION DRILLING P or generate 4.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASM Pacific Technology vs. PRECISION DRILLING P
Performance |
| Timeline |
| ASM Pacific Technology |
| PRECISION DRILLING |
ASM Pacific and PRECISION DRILLING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASM Pacific and PRECISION DRILLING
The main advantage of trading using opposite ASM Pacific and PRECISION DRILLING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASM Pacific position performs unexpectedly, PRECISION DRILLING 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 PRECISION DRILLING will offset losses from the drop in PRECISION DRILLING's long position.| ASM Pacific vs. ASML HOLDING NY | ASM Pacific vs. ASML Holding NV | ASM Pacific vs. ASML Holding NV | ASM Pacific vs. Applied Materials |
| PRECISION DRILLING vs. Sinopec Oilfield Service | PRECISION DRILLING vs. Helmerich Payne | PRECISION DRILLING vs. Patterson UTI Energy | PRECISION DRILLING vs. Nabors Industries |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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