Correlation Between YuantaP Shares and Chih Lien
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Chih Lien 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 Chih Lien 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 Chih Lien Industrial, you can compare the effects of market volatilities on YuantaP Shares and Chih Lien 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 Chih Lien. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Chih Lien.
Diversification Opportunities for YuantaP Shares and Chih Lien
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between YuantaP and Chih is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Top and Chih Lien Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chih Lien Industrial 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 Chih Lien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chih Lien Industrial has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Chih Lien go up and down completely randomly.
Pair Corralation between YuantaP Shares and Chih Lien
Assuming the 90 days trading horizon YuantaP shares Taiwan Top is expected to under-perform the Chih Lien. But the etf apears to be less risky and, when comparing its historical volatility, YuantaP shares Taiwan Top is 1.59 times less risky than Chih Lien. The etf trades about -0.09 of its potential returns per unit of risk. The Chih Lien Industrial is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,030 in Chih Lien Industrial on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Chih Lien Industrial or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
YuantaP shares Taiwan Top vs. Chih Lien Industrial
Performance |
| Timeline |
| YuantaP shares Taiwan |
| Chih Lien Industrial |
YuantaP Shares and Chih Lien Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Chih Lien
The main advantage of trading using opposite YuantaP Shares and Chih Lien positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Chih Lien 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 Chih Lien will offset losses from the drop in Chih Lien'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 |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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