Correlation Between YuantaP Shares and Grand Ocean
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Grand Ocean 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 Grand Ocean 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 Grand Ocean Retail, you can compare the effects of market volatilities on YuantaP Shares and Grand Ocean 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 Grand Ocean. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Grand Ocean.
Diversification Opportunities for YuantaP Shares and Grand Ocean
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between YuantaP and Grand is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Top and Grand Ocean Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Ocean Retail 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 Grand Ocean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Ocean Retail has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Grand Ocean go up and down completely randomly.
Pair Corralation between YuantaP Shares and Grand Ocean
Assuming the 90 days trading horizon YuantaP shares Taiwan Top is expected to generate 0.56 times more return on investment than Grand Ocean. However, YuantaP shares Taiwan Top is 1.8 times less risky than Grand Ocean. It trades about 0.12 of its potential returns per unit of risk. Grand Ocean Retail is currently generating about 0.02 per unit of risk. If you would invest 13,367 in YuantaP shares Taiwan Top on August 28, 2024 and sell it today you would earn a total of 5,868 from holding YuantaP shares Taiwan Top or generate 43.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.51% |
| Values | Daily Returns |
YuantaP shares Taiwan Top vs. Grand Ocean Retail
Performance |
| Timeline |
| YuantaP shares Taiwan |
| Grand Ocean Retail |
YuantaP Shares and Grand Ocean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Grand Ocean
The main advantage of trading using opposite YuantaP Shares and Grand Ocean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Grand Ocean 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 Grand Ocean will offset losses from the drop in Grand Ocean's long position.The idea behind YuantaP shares Taiwan Top and Grand Ocean Retail pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Grand Ocean vs. Far Eastern Department | Grand Ocean vs. LongDa Construction Development | Grand Ocean vs. Collins Co | Grand Ocean vs. HannStar Board Corp |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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