Correlation Between YuantaP Shares and Froch Enterprise
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Froch Enterprise 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 Froch Enterprise 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 Froch Enterprise Co, you can compare the effects of market volatilities on YuantaP Shares and Froch Enterprise 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 Froch Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Froch Enterprise.
Diversification Opportunities for YuantaP Shares and Froch Enterprise
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between YuantaP and Froch is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Top and Froch Enterprise Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Froch Enterprise 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 Froch Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Froch Enterprise has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Froch Enterprise go up and down completely randomly.
Pair Corralation between YuantaP Shares and Froch Enterprise
Assuming the 90 days trading horizon YuantaP shares Taiwan Top is expected to generate 0.8 times more return on investment than Froch Enterprise. However, YuantaP shares Taiwan Top is 1.25 times less risky than Froch Enterprise. It trades about 0.04 of its potential returns per unit of risk. Froch Enterprise Co is currently generating about -0.11 per unit of risk. If you would invest 18,395 in YuantaP shares Taiwan Top on August 30, 2024 and sell it today you would earn a total of 315.00 from holding YuantaP shares Taiwan Top or generate 1.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 93.02% |
| Values | Daily Returns |
YuantaP shares Taiwan Top vs. Froch Enterprise Co
Performance |
| Timeline |
| YuantaP shares Taiwan |
| Froch Enterprise |
YuantaP Shares and Froch Enterprise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Froch Enterprise
The main advantage of trading using opposite YuantaP Shares and Froch Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Froch Enterprise 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 Froch Enterprise will offset losses from the drop in Froch Enterprise's long position.| YuantaP Shares vs. Yuanta Daily Taiwan | YuantaP Shares vs. Symtek Automation Asia | YuantaP Shares vs. CTCI Corp | YuantaP Shares vs. Information Technology Total |
| Froch Enterprise vs. Ta Chen Stainless | Froch Enterprise vs. Chung Hung Steel | Froch Enterprise vs. YC Inox Co | Froch Enterprise vs. Sheng Yu Steel |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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