Correlation Between YuantaP Shares and Sheng Yu
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Sheng Yu 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 Sheng Yu 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 Sheng Yu Steel, you can compare the effects of market volatilities on YuantaP Shares and Sheng Yu 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 Sheng Yu. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Sheng Yu.
Diversification Opportunities for YuantaP Shares and Sheng Yu
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between YuantaP and Sheng is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Top and Sheng Yu Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sheng Yu Steel 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 Sheng Yu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sheng Yu Steel has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Sheng Yu go up and down completely randomly.
Pair Corralation between YuantaP Shares and Sheng Yu
Assuming the 90 days trading horizon YuantaP shares Taiwan Top is expected to generate 1.58 times more return on investment than Sheng Yu. However, YuantaP Shares is 1.58 times more volatile than Sheng Yu Steel. It trades about 0.11 of its potential returns per unit of risk. Sheng Yu Steel is currently generating about -0.06 per unit of risk. If you would invest 13,970 in YuantaP shares Taiwan Top on November 4, 2024 and sell it today you would earn a total of 6,160 from holding YuantaP shares Taiwan Top or generate 44.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.9% |
| Values | Daily Returns |
YuantaP shares Taiwan Top vs. Sheng Yu Steel
Performance |
| Timeline |
| YuantaP shares Taiwan |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Sheng Yu Steel |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
YuantaP Shares and Sheng Yu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Sheng Yu
The main advantage of trading using opposite YuantaP Shares and Sheng Yu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Sheng Yu 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 Sheng Yu will offset losses from the drop in Sheng Yu's long position.The idea behind YuantaP shares Taiwan Top and Sheng Yu Steel pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |