Correlation Between YuantaP Shares and CHINA DEVELOPMENT
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and CHINA DEVELOPMENT 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 CHINA DEVELOPMENT 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 CHINA DEVELOPMENT FINANCIAL, you can compare the effects of market volatilities on YuantaP Shares and CHINA DEVELOPMENT 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 CHINA DEVELOPMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and CHINA DEVELOPMENT.
Diversification Opportunities for YuantaP Shares and CHINA DEVELOPMENT
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between YuantaP and CHINA is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Mid Cap and CHINA DEVELOPMENT FINANCIAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA DEVELOPMENT 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 CHINA DEVELOPMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA DEVELOPMENT has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and CHINA DEVELOPMENT go up and down completely randomly.
Pair Corralation between YuantaP Shares and CHINA DEVELOPMENT
Assuming the 90 days trading horizon YuantaP shares Taiwan Mid Cap is expected to generate 2.24 times more return on investment than CHINA DEVELOPMENT. However, YuantaP Shares is 2.24 times more volatile than CHINA DEVELOPMENT FINANCIAL. It trades about 0.07 of its potential returns per unit of risk. CHINA DEVELOPMENT FINANCIAL is currently generating about 0.08 per unit of risk. If you would invest 5,795 in YuantaP shares Taiwan Mid Cap on August 31, 2024 and sell it today you would earn a total of 1,795 from holding YuantaP shares Taiwan Mid Cap or generate 30.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
YuantaP shares Taiwan Mid Cap vs. CHINA DEVELOPMENT FINANCIAL
Performance |
| Timeline |
| YuantaP shares Taiwan |
| CHINA DEVELOPMENT |
YuantaP Shares and CHINA DEVELOPMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and CHINA DEVELOPMENT
The main advantage of trading using opposite YuantaP Shares and CHINA DEVELOPMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, CHINA DEVELOPMENT 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 CHINA DEVELOPMENT will offset losses from the drop in CHINA DEVELOPMENT'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 |
| CHINA DEVELOPMENT vs. Fubon Financial Holding | CHINA DEVELOPMENT vs. CTBC Financial Holding | CHINA DEVELOPMENT vs. YuantaP shares Taiwan Mid Cap | CHINA DEVELOPMENT vs. YuantaP shares Taiwan Electronics |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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