Correlation Between YuantaP Shares and WIN Semiconductors
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and WIN Semiconductors 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 WIN Semiconductors 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 WIN Semiconductors, you can compare the effects of market volatilities on YuantaP Shares and WIN Semiconductors 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 WIN Semiconductors. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and WIN Semiconductors.
Diversification Opportunities for YuantaP Shares and WIN Semiconductors
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between YuantaP and WIN is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Top and WIN Semiconductors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIN Semiconductors 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 WIN Semiconductors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIN Semiconductors has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and WIN Semiconductors go up and down completely randomly.
Pair Corralation between YuantaP Shares and WIN Semiconductors
Assuming the 90 days trading horizon YuantaP shares Taiwan Top is expected to generate 0.53 times more return on investment than WIN Semiconductors. However, YuantaP shares Taiwan Top is 1.88 times less risky than WIN Semiconductors. It trades about 0.08 of its potential returns per unit of risk. WIN Semiconductors is currently generating about -0.03 per unit of risk. If you would invest 11,517 in YuantaP shares Taiwan Top on December 12, 2024 and sell it today you would earn a total of 6,683 from holding YuantaP shares Taiwan Top or generate 58.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.75% |
| Values | Daily Returns |
YuantaP shares Taiwan Top vs. WIN Semiconductors
Performance |
| Timeline |
| YuantaP shares Taiwan |
| WIN Semiconductors |
YuantaP Shares and WIN Semiconductors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and WIN Semiconductors
The main advantage of trading using opposite YuantaP Shares and WIN Semiconductors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, WIN Semiconductors 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 WIN Semiconductors will offset losses from the drop in WIN Semiconductors' long position.| YuantaP Shares vs. YuantaP shares MSCI Taiwan | ||
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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