Correlation Between YuantaP Shares and Lu Hai
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Lu Hai 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 Lu Hai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YuantaP shares Taiwan Mid Cap and Lu Hai Holding, you can compare the effects of market volatilities on YuantaP Shares and Lu Hai 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 Lu Hai. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Lu Hai.
Diversification Opportunities for YuantaP Shares and Lu Hai
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between YuantaP and 2115 is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Mid Cap and Lu Hai Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lu Hai Holding 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 Mid Cap are associated (or correlated) with Lu Hai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lu Hai Holding has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Lu Hai go up and down completely randomly.
Pair Corralation between YuantaP Shares and Lu Hai
Assuming the 90 days trading horizon YuantaP shares Taiwan Mid Cap is expected to generate 0.99 times more return on investment than Lu Hai. However, YuantaP shares Taiwan Mid Cap is 1.01 times less risky than Lu Hai. It trades about 0.08 of its potential returns per unit of risk. Lu Hai Holding is currently generating about 0.01 per unit of risk. If you would invest 5,230 in YuantaP shares Taiwan Mid Cap on August 31, 2024 and sell it today you would earn a total of 2,360 from holding YuantaP shares Taiwan Mid Cap or generate 45.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
YuantaP shares Taiwan Mid Cap vs. Lu Hai Holding
Performance |
| Timeline |
| YuantaP shares Taiwan |
| Lu Hai Holding |
YuantaP Shares and Lu Hai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Lu Hai
The main advantage of trading using opposite YuantaP Shares and Lu Hai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Lu Hai 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 Lu Hai will offset losses from the drop in Lu Hai'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 |
| Lu Hai vs. Chunghwa Chemical Synthesis | Lu Hai vs. Sanyang Motor Co | Lu Hai vs. Turvo International Co | Lu Hai vs. Iron Force Industrial |
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 CEOs Directory module to screen CEOs from public companies around the world.
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