Correlation Between YuantaP Shares and Gudeng Precision
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Gudeng Precision 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 Gudeng Precision 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 Gudeng Precision Industrial, you can compare the effects of market volatilities on YuantaP Shares and Gudeng Precision 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 Gudeng Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Gudeng Precision.
Diversification Opportunities for YuantaP Shares and Gudeng Precision
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between YuantaP and Gudeng is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Top and Gudeng Precision Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gudeng Precision Ind 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 Gudeng Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gudeng Precision Ind has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Gudeng Precision go up and down completely randomly.
Pair Corralation between YuantaP Shares and Gudeng Precision
Assuming the 90 days trading horizon YuantaP Shares is expected to generate 2.7 times less return on investment than Gudeng Precision. But when comparing it to its historical volatility, YuantaP shares Taiwan Top is 1.7 times less risky than Gudeng Precision. It trades about 0.06 of its potential returns per unit of risk. Gudeng Precision Industrial is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 50,400 in Gudeng Precision Industrial on September 14, 2024 and sell it today you would earn a total of 1,700 from holding Gudeng Precision Industrial or generate 3.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
YuantaP shares Taiwan Top vs. Gudeng Precision Industrial
Performance |
| Timeline |
| YuantaP shares Taiwan |
| Gudeng Precision Ind |
YuantaP Shares and Gudeng Precision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Gudeng Precision
The main advantage of trading using opposite YuantaP Shares and Gudeng Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Gudeng Precision 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 Gudeng Precision will offset losses from the drop in Gudeng Precision's long position.| YuantaP Shares vs. Yuanta Daily Taiwan | YuantaP Shares vs. Cathay Taiwan 5G | YuantaP Shares vs. Yuanta Daily CSI | YuantaP Shares vs. Cathay Sustainability High |
| Gudeng Precision vs. GlobalWafers Co | Gudeng Precision vs. Vanguard International Semiconductor | Gudeng Precision vs. Marketech International Corp | Gudeng Precision vs. WIN Semiconductors |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |