Correlation Between YuantaP Shares and Taiwan Cement
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Taiwan Cement 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 Taiwan Cement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YuantaP shares Taiwan Electronics and Taiwan Cement Corp, you can compare the effects of market volatilities on YuantaP Shares and Taiwan Cement 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 Taiwan Cement. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Taiwan Cement.
Diversification Opportunities for YuantaP Shares and Taiwan Cement
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between YuantaP and Taiwan is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Electron and Taiwan Cement Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Cement Corp 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 Electronics are associated (or correlated) with Taiwan Cement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Cement Corp has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Taiwan Cement go up and down completely randomly.
Pair Corralation between YuantaP Shares and Taiwan Cement
Assuming the 90 days trading horizon YuantaP shares Taiwan Electronics is expected to under-perform the Taiwan Cement. In addition to that, YuantaP Shares is 8.28 times more volatile than Taiwan Cement Corp. It trades about -0.17 of its total potential returns per unit of risk. Taiwan Cement Corp is currently generating about -0.04 per unit of volatility. If you would invest 4,665 in Taiwan Cement Corp on August 30, 2024 and sell it today you would lose (5.00) from holding Taiwan Cement Corp or give up 0.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
YuantaP shares Taiwan Electron vs. Taiwan Cement Corp
Performance |
| Timeline |
| YuantaP shares Taiwan |
| Taiwan Cement Corp |
YuantaP Shares and Taiwan Cement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Taiwan Cement
The main advantage of trading using opposite YuantaP Shares and Taiwan Cement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Taiwan Cement 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 Taiwan Cement will offset losses from the drop in Taiwan Cement's long position.| YuantaP Shares vs. Yuanta Daily Taiwan | YuantaP Shares vs. Symtek Automation Asia | YuantaP Shares vs. CTCI Corp | YuantaP Shares vs. Information Technology Total |
| Taiwan Cement vs. Sinopac Financial Holdings | Taiwan Cement vs. Hua Nan Financial | Taiwan Cement vs. Pontex Polyblend CoLtd | Taiwan Cement vs. Wei Chuan Foods |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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