Correlation Between YuantaP Shares and Ambassador Hotel
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Ambassador Hotel 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 Ambassador Hotel 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 Ambassador Hotel, you can compare the effects of market volatilities on YuantaP Shares and Ambassador Hotel 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 Ambassador Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Ambassador Hotel.
Diversification Opportunities for YuantaP Shares and Ambassador Hotel
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between YuantaP and Ambassador is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Mid Cap and Ambassador Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambassador Hotel 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 Ambassador Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambassador Hotel has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Ambassador Hotel go up and down completely randomly.
Pair Corralation between YuantaP Shares and Ambassador Hotel
Assuming the 90 days trading horizon YuantaP shares Taiwan Mid Cap is expected to generate 0.61 times more return on investment than Ambassador Hotel. However, YuantaP shares Taiwan Mid Cap is 1.64 times less risky than Ambassador Hotel. It trades about -0.17 of its potential returns per unit of risk. Ambassador Hotel is currently generating about -0.2 per unit of risk. If you would invest 8,040 in YuantaP shares Taiwan Mid Cap on September 2, 2024 and sell it today you would lose (355.00) from holding YuantaP shares Taiwan Mid Cap or give up 4.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
YuantaP shares Taiwan Mid Cap vs. Ambassador Hotel
Performance |
| Timeline |
| YuantaP shares Taiwan |
| Ambassador Hotel |
YuantaP Shares and Ambassador Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Ambassador Hotel
The main advantage of trading using opposite YuantaP Shares and Ambassador Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Ambassador Hotel 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 Ambassador Hotel will offset losses from the drop in Ambassador Hotel'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 |
| Ambassador Hotel vs. Chaintech Technology Corp | Ambassador Hotel vs. Avision | Ambassador Hotel vs. Clevo Co | Ambassador Hotel vs. Elitegroup Computer Systems |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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