Correlation Between YuantaP Shares and Taiwan Hon
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Taiwan Hon 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 Taiwan Hon 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 Taiwan Hon Chuan, you can compare the effects of market volatilities on YuantaP Shares and Taiwan Hon 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 Taiwan Hon. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Taiwan Hon.
Diversification Opportunities for YuantaP Shares and Taiwan Hon
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between YuantaP and Taiwan is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Top and Taiwan Hon Chuan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Hon Chuan 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 Taiwan Hon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Hon Chuan has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Taiwan Hon go up and down completely randomly.
Pair Corralation between YuantaP Shares and Taiwan Hon
Assuming the 90 days trading horizon YuantaP shares Taiwan Top is expected to generate 0.85 times more return on investment than Taiwan Hon. However, YuantaP shares Taiwan Top is 1.18 times less risky than Taiwan Hon. It trades about -0.11 of its potential returns per unit of risk. Taiwan Hon Chuan is currently generating about -0.13 per unit of risk. If you would invest 19,180 in YuantaP shares Taiwan Top on August 31, 2024 and sell it today you would lose (500.00) from holding YuantaP shares Taiwan Top or give up 2.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
YuantaP shares Taiwan Top vs. Taiwan Hon Chuan
Performance |
| Timeline |
| YuantaP shares Taiwan |
| Taiwan Hon Chuan |
YuantaP Shares and Taiwan Hon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Taiwan Hon
The main advantage of trading using opposite YuantaP Shares and Taiwan Hon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Taiwan Hon 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 Taiwan Hon will offset losses from the drop in Taiwan Hon's long position.| YuantaP Shares vs. Yuanta Daily Taiwan | YuantaP Shares vs. Cathay Taiwan 5G | YuantaP Shares vs. Yuanta Daily CSI | YuantaP Shares vs. Cathay Sustainability High |
| Taiwan Hon vs. China Times Publishing | Taiwan Hon vs. PlayNitride | Taiwan Hon vs. V Tac Technology Co | Taiwan Hon vs. Fubon Taiwan Technology |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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