Correlation Between YuantaP Shares and Acelon Chemicals
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Acelon Chemicals 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 Acelon Chemicals 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 Acelon Chemicals Fiber, you can compare the effects of market volatilities on YuantaP Shares and Acelon Chemicals 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 Acelon Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Acelon Chemicals.
Diversification Opportunities for YuantaP Shares and Acelon Chemicals
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between YuantaP and Acelon is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Top and Acelon Chemicals Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acelon Chemicals 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 Acelon Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acelon Chemicals Fiber has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Acelon Chemicals go up and down completely randomly.
Pair Corralation between YuantaP Shares and Acelon Chemicals
Assuming the 90 days trading horizon YuantaP shares Taiwan Top is expected to generate 0.63 times more return on investment than Acelon Chemicals. However, YuantaP shares Taiwan Top is 1.59 times less risky than Acelon Chemicals. It trades about 0.09 of its potential returns per unit of risk. Acelon Chemicals Fiber is currently generating about 0.04 per unit of risk. If you would invest 12,361 in YuantaP shares Taiwan Top on September 2, 2024 and sell it today you would earn a total of 6,364 from holding YuantaP shares Taiwan Top or generate 51.48% 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. Acelon Chemicals Fiber
Performance |
| Timeline |
| YuantaP shares Taiwan |
| Acelon Chemicals Fiber |
YuantaP Shares and Acelon Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Acelon Chemicals
The main advantage of trading using opposite YuantaP Shares and Acelon Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Acelon Chemicals 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 Acelon Chemicals will offset losses from the drop in Acelon Chemicals' 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 |
| Acelon Chemicals vs. Chaintech Technology Corp | Acelon Chemicals vs. Avision | Acelon Chemicals vs. Clevo Co | Acelon Chemicals vs. Elitegroup Computer Systems |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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