Correlation Between YuantaP Shares and Lotus Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Lotus Pharmaceutical 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 Lotus Pharmaceutical 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 Lotus Pharmaceutical Co, you can compare the effects of market volatilities on YuantaP Shares and Lotus Pharmaceutical 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 Lotus Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Lotus Pharmaceutical.
Diversification Opportunities for YuantaP Shares and Lotus Pharmaceutical
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between YuantaP and Lotus is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Top and Lotus Pharmaceutical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Pharmaceutical 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 Lotus Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Pharmaceutical has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Lotus Pharmaceutical go up and down completely randomly.
Pair Corralation between YuantaP Shares and Lotus Pharmaceutical
Assuming the 90 days trading horizon YuantaP shares Taiwan Top is expected to generate 0.57 times more return on investment than Lotus Pharmaceutical. However, YuantaP shares Taiwan Top is 1.76 times less risky than Lotus Pharmaceutical. It trades about 0.09 of its potential returns per unit of risk. Lotus Pharmaceutical Co is currently generating about 0.0 per unit of risk. If you would invest 12,155 in YuantaP shares Taiwan Top on August 31, 2024 and sell it today you would earn a total of 6,570 from holding YuantaP shares Taiwan Top or generate 54.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.37% |
| Values | Daily Returns |
YuantaP shares Taiwan Top vs. Lotus Pharmaceutical Co
Performance |
| Timeline |
| YuantaP shares Taiwan |
| Lotus Pharmaceutical |
YuantaP Shares and Lotus Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Lotus Pharmaceutical
The main advantage of trading using opposite YuantaP Shares and Lotus Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Lotus Pharmaceutical 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 Lotus Pharmaceutical will offset losses from the drop in Lotus Pharmaceutical's long position.| YuantaP Shares vs. Yuanta Daily Taiwan | YuantaP Shares vs. Cathay Taiwan 5G | YuantaP Shares vs. Yuanta Daily CSI | YuantaP Shares vs. Fubon FTSE Vietnam |
| Lotus Pharmaceutical vs. Chung Hsin Electric Machinery | Lotus Pharmaceutical vs. Nan Ya Printed | Lotus Pharmaceutical vs. Panion BF Biotech | Lotus Pharmaceutical vs. Adimmune Corp |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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