Correlation Between YuantaP Shares and Hotai
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Hotai 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 Hotai 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 Hotai Motor Co, you can compare the effects of market volatilities on YuantaP Shares and Hotai 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 Hotai. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Hotai.
Diversification Opportunities for YuantaP Shares and Hotai
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between YuantaP and Hotai is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Mid Cap and Hotai Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotai Motor 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 Hotai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotai Motor has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Hotai go up and down completely randomly.
Pair Corralation between YuantaP Shares and Hotai
Assuming the 90 days trading horizon YuantaP shares Taiwan Mid Cap is expected to under-perform the Hotai. But the etf apears to be less risky and, when comparing its historical volatility, YuantaP shares Taiwan Mid Cap is 1.18 times less risky than Hotai. The etf trades about -0.21 of its potential returns per unit of risk. The Hotai Motor Co is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 64,900 in Hotai Motor Co on August 31, 2024 and sell it today you would lose (2,600) from holding Hotai Motor Co or give up 4.01% of portfolio value 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. Hotai Motor Co
Performance |
| Timeline |
| YuantaP shares Taiwan |
| Hotai Motor |
YuantaP Shares and Hotai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Hotai
The main advantage of trading using opposite YuantaP Shares and Hotai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Hotai 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 Hotai will offset losses from the drop in Hotai's long position.| YuantaP Shares vs. Yuanta Daily Taiwan | YuantaP Shares vs. Cathay Taiwan 5G | YuantaP Shares vs. Yuanta Daily CSI | YuantaP Shares vs. Fubon FTSE Vietnam |
| Hotai vs. President Chain Store | Hotai vs. Formosa Petrochemical Corp | Hotai vs. Cheng Shin Rubber | Hotai vs. Formosa Chemicals Fibre |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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