Correlation Between YuantaP Shares and Asia Vital
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Asia Vital 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 Asia Vital 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 Asia Vital Components, you can compare the effects of market volatilities on YuantaP Shares and Asia Vital 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 Asia Vital. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Asia Vital.
Diversification Opportunities for YuantaP Shares and Asia Vital
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between YuantaP and Asia is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Top and Asia Vital Components in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Vital Components 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 Asia Vital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Vital Components has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Asia Vital go up and down completely randomly.
Pair Corralation between YuantaP Shares and Asia Vital
Assuming the 90 days trading horizon YuantaP Shares is expected to generate 3.88 times less return on investment than Asia Vital. But when comparing it to its historical volatility, YuantaP shares Taiwan Top is 2.01 times less risky than Asia Vital. It trades about 0.06 of its potential returns per unit of risk. Asia Vital Components is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 58,100 in Asia Vital Components on August 26, 2024 and sell it today you would earn a total of 7,100 from holding Asia Vital Components or generate 12.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 93.02% |
| Values | Daily Returns |
YuantaP shares Taiwan Top vs. Asia Vital Components
Performance |
| Timeline |
| YuantaP shares Taiwan |
| Asia Vital Components |
YuantaP Shares and Asia Vital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Asia Vital
The main advantage of trading using opposite YuantaP Shares and Asia Vital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Asia Vital 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 Asia Vital will offset losses from the drop in Asia Vital's long position.| YuantaP Shares vs. Cathay Taiwan 5G | YuantaP Shares vs. Yuanta Daily CSI | YuantaP Shares vs. Fuh Hwa Emerging | YuantaP Shares vs. Paradigm SP GSCI |
| Asia Vital vs. Novatek Microelectronics Corp | Asia Vital vs. Quanta Computer | Asia Vital vs. United Microelectronics |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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