Correlation Between YuantaP Shares and Power Wind
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Power Wind 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 Power Wind 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 Power Wind Health, you can compare the effects of market volatilities on YuantaP Shares and Power Wind 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 Power Wind. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Power Wind.
Diversification Opportunities for YuantaP Shares and Power Wind
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between YuantaP and Power is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Top and Power Wind Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Wind Health 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 Power Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Wind Health has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Power Wind go up and down completely randomly.
Pair Corralation between YuantaP Shares and Power Wind
Assuming the 90 days trading horizon YuantaP shares Taiwan Top is expected to generate 0.96 times more return on investment than Power Wind. However, YuantaP shares Taiwan Top is 1.05 times less risky than Power Wind. It trades about 0.09 of its potential returns per unit of risk. Power Wind Health is currently generating about -0.21 per unit of risk. If you would invest 18,500 in YuantaP shares Taiwan Top on August 25, 2024 and sell it today you would earn a total of 805.00 from holding YuantaP shares Taiwan Top or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 93.18% |
| Values | Daily Returns |
YuantaP shares Taiwan Top vs. Power Wind Health
Performance |
| Timeline |
| YuantaP shares Taiwan |
| Power Wind Health |
YuantaP Shares and Power Wind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Power Wind
The main advantage of trading using opposite YuantaP Shares and Power Wind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Power Wind 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 Power Wind will offset losses from the drop in Power Wind's long position.| YuantaP Shares vs. Cathay Taiwan 5G | YuantaP Shares vs. Yuanta Daily CSI | YuantaP Shares vs. Fuh Hwa Emerging | YuantaP Shares vs. Paradigm SP GSCI |
| Power Wind vs. Giant Manufacturing Co | Power Wind vs. Johnson Health Tech | Power Wind vs. Sports Gear Co |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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