Correlation Between YuantaP Shares and Hong Yi
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Hong Yi 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 Hong Yi 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 Hong Yi Fiber, you can compare the effects of market volatilities on YuantaP Shares and Hong Yi 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 Hong Yi. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Hong Yi.
Diversification Opportunities for YuantaP Shares and Hong Yi
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between YuantaP and Hong is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Top and Hong Yi Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Yi Fiber 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 Hong Yi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hong Yi Fiber has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Hong Yi go up and down completely randomly.
Pair Corralation between YuantaP Shares and Hong Yi
Assuming the 90 days trading horizon YuantaP shares Taiwan Top is expected to generate 2.05 times more return on investment than Hong Yi. However, YuantaP Shares is 2.05 times more volatile than Hong Yi Fiber. It trades about 0.11 of its potential returns per unit of risk. Hong Yi Fiber is currently generating about -0.04 per unit of risk. If you would invest 12,907 in YuantaP shares Taiwan Top on September 3, 2024 and sell it today you would earn a total of 5,818 from holding YuantaP shares Taiwan Top or generate 45.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.75% |
| Values | Daily Returns |
YuantaP shares Taiwan Top vs. Hong Yi Fiber
Performance |
| Timeline |
| YuantaP shares Taiwan |
| Hong Yi Fiber |
YuantaP Shares and Hong Yi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Hong Yi
The main advantage of trading using opposite YuantaP Shares and Hong Yi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Hong Yi 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 Hong Yi will offset losses from the drop in Hong Yi'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 |
| Hong Yi vs. Yi Jinn Industrial | Hong Yi vs. Zig Sheng Industrial | Hong Yi vs. Lan Fa Textile | Hong Yi vs. Tainan Spinning Co |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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