Correlation Between YuantaP Shares and GlobalWafers
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and GlobalWafers 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 GlobalWafers 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 GlobalWafers Co, you can compare the effects of market volatilities on YuantaP Shares and GlobalWafers 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 GlobalWafers. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and GlobalWafers.
Diversification Opportunities for YuantaP Shares and GlobalWafers
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between YuantaP and GlobalWafers is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Top and GlobalWafers Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GlobalWafers 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 GlobalWafers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GlobalWafers has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and GlobalWafers go up and down completely randomly.
Pair Corralation between YuantaP Shares and GlobalWafers
Assuming the 90 days trading horizon YuantaP shares Taiwan Top is expected to generate 0.74 times more return on investment than GlobalWafers. However, YuantaP shares Taiwan Top is 1.36 times less risky than GlobalWafers. It trades about 0.1 of its potential returns per unit of risk. GlobalWafers Co is currently generating about 0.01 per unit of risk. If you would invest 10,782 in YuantaP shares Taiwan Top on August 30, 2024 and sell it today you would earn a total of 7,928 from holding YuantaP shares Taiwan Top or generate 73.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.75% |
| Values | Daily Returns |
YuantaP shares Taiwan Top vs. GlobalWafers Co
Performance |
| Timeline |
| YuantaP shares Taiwan |
| GlobalWafers |
YuantaP Shares and GlobalWafers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and GlobalWafers
The main advantage of trading using opposite YuantaP Shares and GlobalWafers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, GlobalWafers 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 GlobalWafers will offset losses from the drop in GlobalWafers' 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 |
| GlobalWafers vs. WIN Semiconductors | GlobalWafers vs. Sino American Silicon Products | GlobalWafers vs. Novatek Microelectronics Corp | GlobalWafers vs. Yageo 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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