Correlation Between YuantaP Shares and China Metal
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and China Metal 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 China Metal 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 China Metal Products, you can compare the effects of market volatilities on YuantaP Shares and China Metal 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 China Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and China Metal.
Diversification Opportunities for YuantaP Shares and China Metal
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between YuantaP and China is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Top and China Metal Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Metal Products 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 China Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Metal Products has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and China Metal go up and down completely randomly.
Pair Corralation between YuantaP Shares and China Metal
Assuming the 90 days trading horizon YuantaP shares Taiwan Top is expected to generate 0.6 times more return on investment than China Metal. However, YuantaP shares Taiwan Top is 1.66 times less risky than China Metal. It trades about -0.07 of its potential returns per unit of risk. China Metal Products is currently generating about -0.18 per unit of risk. If you would invest 19,605 in YuantaP shares Taiwan Top on August 27, 2024 and sell it today you would lose (370.00) from holding YuantaP shares Taiwan Top or give up 1.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
YuantaP shares Taiwan Top vs. China Metal Products
Performance |
| Timeline |
| YuantaP shares Taiwan |
| China Metal Products |
YuantaP Shares and China Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and China Metal
The main advantage of trading using opposite YuantaP Shares and China Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, China Metal 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 China Metal will offset losses from the drop in China Metal'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 |
| China Metal vs. Basso Industry Corp | China Metal vs. Chung Hsin Electric Machinery | China Metal vs. TYC Brother Industrial | China Metal vs. TECO Electric Machinery |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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