Correlation Between YuantaP Shares and CTBC TIP
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and CTBC TIP 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 CTBC TIP 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 CTBC TIP Customized, you can compare the effects of market volatilities on YuantaP Shares and CTBC TIP 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 CTBC TIP. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and CTBC TIP.
Diversification Opportunities for YuantaP Shares and CTBC TIP
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between YuantaP and CTBC is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Top and CTBC TIP Customized in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTBC TIP Customized 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 CTBC TIP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTBC TIP Customized has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and CTBC TIP go up and down completely randomly.
Pair Corralation between YuantaP Shares and CTBC TIP
Assuming the 90 days trading horizon YuantaP shares Taiwan Top is expected to generate 1.65 times more return on investment than CTBC TIP. However, YuantaP Shares is 1.65 times more volatile than CTBC TIP Customized. It trades about -0.02 of its potential returns per unit of risk. CTBC TIP Customized is currently generating about -0.18 per unit of risk. If you would invest 19,295 in YuantaP shares Taiwan Top on September 4, 2024 and sell it today you would lose (125.00) from holding YuantaP shares Taiwan Top or give up 0.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
YuantaP shares Taiwan Top vs. CTBC TIP Customized
Performance |
| Timeline |
| YuantaP shares Taiwan |
| CTBC TIP Customized |
YuantaP Shares and CTBC TIP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and CTBC TIP
The main advantage of trading using opposite YuantaP Shares and CTBC TIP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, CTBC TIP 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 CTBC TIP will offset losses from the drop in CTBC TIP's long position.| YuantaP Shares vs. Cathay Taiwan 5G | YuantaP Shares vs. Ruentex Development Co | YuantaP Shares vs. Symtek Automation Asia | YuantaP Shares vs. CTCI Corp |
| CTBC TIP vs. YuantaP shares Taiwan Top | CTBC TIP vs. Yuanta Daily Taiwan | CTBC TIP vs. Cathay Taiwan 5G | CTBC TIP vs. Yuanta Daily CSI |
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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