Correlation Between YuantaP Shares and ALFORMER Industrial
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and ALFORMER Industrial 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 ALFORMER Industrial 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 ALFORMER Industrial Co, you can compare the effects of market volatilities on YuantaP Shares and ALFORMER Industrial 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 ALFORMER Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and ALFORMER Industrial.
Diversification Opportunities for YuantaP Shares and ALFORMER Industrial
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between YuantaP and ALFORMER is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Top and ALFORMER Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALFORMER Industrial 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 ALFORMER Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALFORMER Industrial has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and ALFORMER Industrial go up and down completely randomly.
Pair Corralation between YuantaP Shares and ALFORMER Industrial
Assuming the 90 days trading horizon YuantaP shares Taiwan Top is expected to generate 0.2 times more return on investment than ALFORMER Industrial. However, YuantaP shares Taiwan Top is 4.92 times less risky than ALFORMER Industrial. It trades about -0.09 of its potential returns per unit of risk. ALFORMER Industrial Co is currently generating about -0.06 per unit of risk. If you would invest 19,150 in YuantaP shares Taiwan Top on August 30, 2024 and sell it today you would lose (440.00) from holding YuantaP shares Taiwan Top or give up 2.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
YuantaP shares Taiwan Top vs. ALFORMER Industrial Co
Performance |
| Timeline |
| YuantaP shares Taiwan |
| ALFORMER Industrial |
YuantaP Shares and ALFORMER Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and ALFORMER Industrial
The main advantage of trading using opposite YuantaP Shares and ALFORMER Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, ALFORMER Industrial 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 ALFORMER Industrial will offset losses from the drop in ALFORMER Industrial'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 |
| ALFORMER Industrial vs. Sporton International | ALFORMER Industrial vs. Great China Metal | ALFORMER Industrial vs. Feng Ching Metal | ALFORMER Industrial vs. Ibase Gaming |
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 CEOs Directory module to screen CEOs from public companies around the world.
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