Correlation Between YuantaP Shares and CSBC Corp
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and CSBC Corp 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 CSBC Corp 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 CSBC Corp Taiwan, you can compare the effects of market volatilities on YuantaP Shares and CSBC Corp 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 CSBC Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and CSBC Corp.
Diversification Opportunities for YuantaP Shares and CSBC Corp
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between YuantaP and CSBC is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Mid Cap and CSBC Corp Taiwan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSBC Corp Taiwan 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 CSBC Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSBC Corp Taiwan has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and CSBC Corp go up and down completely randomly.
Pair Corralation between YuantaP Shares and CSBC Corp
Assuming the 90 days trading horizon YuantaP shares Taiwan Mid Cap is expected to generate 0.6 times more return on investment than CSBC Corp. However, YuantaP shares Taiwan Mid Cap is 1.68 times less risky than CSBC Corp. It trades about 0.08 of its potential returns per unit of risk. CSBC Corp Taiwan is currently generating about -0.01 per unit of risk. If you would invest 5,230 in YuantaP shares Taiwan Mid Cap on September 2, 2024 and sell it today you would earn a total of 2,455 from holding YuantaP shares Taiwan Mid Cap or generate 46.94% 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. CSBC Corp Taiwan
Performance |
| Timeline |
| YuantaP shares Taiwan |
| CSBC Corp Taiwan |
YuantaP Shares and CSBC Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and CSBC Corp
The main advantage of trading using opposite YuantaP Shares and CSBC Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, CSBC Corp 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 CSBC Corp will offset losses from the drop in CSBC Corp's long position.| YuantaP Shares vs. YuantaP shares Taiwan Top | YuantaP Shares vs. YuantaP shares MSCI Taiwan | YuantaP Shares vs. YuantaP shares Taiwan GreTai | YuantaP Shares vs. YuantaP shares SSE50 |
| CSBC Corp vs. Sincere Navigation Corp | CSBC Corp vs. Evergreen International Storage | CSBC Corp vs. First Steamship Co | CSBC Corp vs. Mercuries Life Insurance |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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