Correlation Between YuantaP Shares and Eastern Media
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Eastern Media 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 Eastern Media 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 Eastern Media International, you can compare the effects of market volatilities on YuantaP Shares and Eastern Media 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 Eastern Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Eastern Media.
Diversification Opportunities for YuantaP Shares and Eastern Media
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between YuantaP and Eastern is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Mid Cap and Eastern Media International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Media Intern 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 Eastern Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Media Intern has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Eastern Media go up and down completely randomly.
Pair Corralation between YuantaP Shares and Eastern Media
Assuming the 90 days trading horizon YuantaP Shares is expected to generate 4.79 times less return on investment than Eastern Media. But when comparing it to its historical volatility, YuantaP shares Taiwan Mid Cap is 1.26 times less risky than Eastern Media. It trades about 0.02 of its potential returns per unit of risk. Eastern Media International is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,665 in Eastern Media International on October 25, 2024 and sell it today you would earn a total of 25.00 from holding Eastern Media International or generate 1.5% 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. Eastern Media International
Performance |
| Timeline |
| YuantaP shares Taiwan |
| Eastern Media Intern |
YuantaP Shares and Eastern Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Eastern Media
The main advantage of trading using opposite YuantaP Shares and Eastern Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Eastern Media 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 Eastern Media will offset losses from the drop in Eastern Media'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 |
| Eastern Media vs. Yang Ming Marine | Eastern Media vs. Wan Hai Lines | Eastern Media vs. U Ming Marine Transport | Eastern Media vs. Taiwan Navigation 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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