Correlation Between YuantaP Shares and King Yuan
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and King Yuan 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 King Yuan 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 King Yuan Electronics, you can compare the effects of market volatilities on YuantaP Shares and King Yuan 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 King Yuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and King Yuan.
Diversification Opportunities for YuantaP Shares and King Yuan
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between YuantaP and King is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Top and King Yuan Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on King Yuan Electronics 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 King Yuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of King Yuan Electronics has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and King Yuan go up and down completely randomly.
Pair Corralation between YuantaP Shares and King Yuan
Assuming the 90 days trading horizon YuantaP shares Taiwan Top is expected to under-perform the King Yuan. But the etf apears to be less risky and, when comparing its historical volatility, YuantaP shares Taiwan Top is 2.09 times less risky than King Yuan. The etf trades about -0.07 of its potential returns per unit of risk. The King Yuan Electronics is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 12,550 in King Yuan Electronics on September 1, 2024 and sell it today you would earn a total of 100.00 from holding King Yuan Electronics or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
YuantaP shares Taiwan Top vs. King Yuan Electronics
Performance |
| Timeline |
| YuantaP shares Taiwan |
| King Yuan Electronics |
YuantaP Shares and King Yuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and King Yuan
The main advantage of trading using opposite YuantaP Shares and King Yuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, King Yuan 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 King Yuan will offset losses from the drop in King Yuan's long position.| YuantaP Shares vs. Yuanta Daily Taiwan | YuantaP Shares vs. Yuanta Daily CSI | YuantaP Shares vs. Fubon FTSE Vietnam | YuantaP Shares vs. Fuh Hwa Emerging |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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