Correlation Between YuantaP Shares and Chlitina Holding
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Chlitina Holding 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 Chlitina Holding 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 Chlitina Holding, you can compare the effects of market volatilities on YuantaP Shares and Chlitina Holding 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 Chlitina Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Chlitina Holding.
Diversification Opportunities for YuantaP Shares and Chlitina Holding
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between YuantaP and Chlitina is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Mid Cap and Chlitina Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chlitina Holding 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 Chlitina Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chlitina Holding has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Chlitina Holding go up and down completely randomly.
Pair Corralation between YuantaP Shares and Chlitina Holding
Assuming the 90 days trading horizon YuantaP shares Taiwan Mid Cap is expected to generate 0.7 times more return on investment than Chlitina Holding. However, YuantaP shares Taiwan Mid Cap is 1.43 times less risky than Chlitina Holding. It trades about -0.17 of its potential returns per unit of risk. Chlitina Holding is currently generating about -0.53 per unit of risk. If you would invest 8,040 in YuantaP shares Taiwan Mid Cap on September 3, 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. Chlitina Holding
Performance |
| Timeline |
| YuantaP shares Taiwan |
| Chlitina Holding |
YuantaP Shares and Chlitina Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Chlitina Holding
The main advantage of trading using opposite YuantaP Shares and Chlitina Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Chlitina Holding 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 Chlitina Holding will offset losses from the drop in Chlitina Holding's long position.| YuantaP Shares vs. Cathay Taiwan 5G | YuantaP Shares vs. Ruentex Development Co | YuantaP Shares vs. Symtek Automation Asia | YuantaP Shares vs. CTCI Corp |
| Chlitina Holding vs. Standard Foods Corp | Chlitina Holding vs. TTET Union Corp | Chlitina Holding vs. Uni President Enterprises Corp | Chlitina Holding vs. Charoen Pokphand Enterprise |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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