Correlation Between YuantaP Shares and Yuanta Daily
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Yuanta Daily 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 YuantaP Shares and Yuanta Daily into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YuantaP shares Taiwan Top and Yuanta Daily CSI, you can compare the effects of market volatilities on YuantaP Shares and Yuanta Daily 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 YuantaP Shares with a short position of Yuanta Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Yuanta Daily.
Diversification Opportunities for YuantaP Shares and Yuanta Daily
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between YuantaP and Yuanta is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Top and Yuanta Daily CSI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuanta Daily CSI and YuantaP Shares 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 YuantaP shares Taiwan Top are associated (or correlated) with Yuanta Daily. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuanta Daily CSI has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Yuanta Daily go up and down completely randomly.
Pair Corralation between YuantaP Shares and Yuanta Daily
Assuming the 90 days trading horizon YuantaP shares Taiwan Top is expected to generate 0.52 times more return on investment than Yuanta Daily. However, YuantaP shares Taiwan Top is 1.94 times less risky than Yuanta Daily. It trades about 0.1 of its potential returns per unit of risk. Yuanta Daily CSI is currently generating about 0.03 per unit of risk. If you would invest 12,107 in YuantaP shares Taiwan Top on August 27, 2024 and sell it today you would earn a total of 7,198 from holding YuantaP shares Taiwan Top or generate 59.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.36% |
| Values | Daily Returns |
YuantaP shares Taiwan Top vs. Yuanta Daily CSI
Performance |
| Timeline |
| YuantaP shares Taiwan |
| Yuanta Daily CSI |
YuantaP Shares and Yuanta Daily Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Yuanta Daily
The main advantage of trading using opposite YuantaP Shares and Yuanta Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Yuanta Daily 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 Yuanta Daily will offset losses from the drop in Yuanta Daily's long position.| YuantaP Shares vs. YuantaP shares MSCI Taiwan | YuantaP Shares vs. YuantaP shares Taiwan GreTai | YuantaP Shares vs. YuantaP shares SSE50 | YuantaP Shares vs. YuantaP shares Taiwan Mid Cap |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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