Correlation Between YuantaP Shares and Global Brands
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Global Brands 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 Global Brands 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 Global Brands Manufacture, you can compare the effects of market volatilities on YuantaP Shares and Global Brands 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 Global Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Global Brands.
Diversification Opportunities for YuantaP Shares and Global Brands
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between YuantaP and Global is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Top and Global Brands Manufacture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Brands Manufacture 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 Global Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Brands Manufacture has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Global Brands go up and down completely randomly.
Pair Corralation between YuantaP Shares and Global Brands
Assuming the 90 days trading horizon YuantaP shares Taiwan Top is expected to generate 0.8 times more return on investment than Global Brands. However, YuantaP shares Taiwan Top is 1.25 times less risky than Global Brands. It trades about -0.1 of its potential returns per unit of risk. Global Brands Manufacture is currently generating about -0.14 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 (470.00) from holding YuantaP shares Taiwan Top or give up 2.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
YuantaP shares Taiwan Top vs. Global Brands Manufacture
Performance |
| Timeline |
| YuantaP shares Taiwan |
| Global Brands Manufacture |
YuantaP Shares and Global Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Global Brands
The main advantage of trading using opposite YuantaP Shares and Global Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Global Brands 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 Global Brands will offset losses from the drop in Global Brands' long position.| YuantaP Shares vs. Symtek Automation Asia | YuantaP Shares vs. CTCI Corp | YuantaP Shares vs. Information Technology Total | YuantaP Shares vs. Kinko Optical Co |
| Global Brands vs. HannStar Board Corp | Global Brands vs. ITEQ Corp | Global Brands vs. Unitech Printed Circuit | Global Brands vs. Career Technology MFG |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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