Correlation Between YuantaP Shares and Hua Eng
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Hua Eng 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 Hua Eng 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 Hua Eng Wire, you can compare the effects of market volatilities on YuantaP Shares and Hua Eng 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 Hua Eng. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Hua Eng.
Diversification Opportunities for YuantaP Shares and Hua Eng
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between YuantaP and Hua is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Electron and Hua Eng Wire in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hua Eng Wire 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 Hua Eng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hua Eng Wire has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Hua Eng go up and down completely randomly.
Pair Corralation between YuantaP Shares and Hua Eng
Assuming the 90 days trading horizon YuantaP Shares is expected to generate 1.4 times less return on investment than Hua Eng. But when comparing it to its historical volatility, YuantaP shares Taiwan Electronics is 1.94 times less risky than Hua Eng. It trades about 0.09 of its potential returns per unit of risk. Hua Eng Wire is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,425 in Hua Eng Wire on August 30, 2024 and sell it today you would earn a total of 1,480 from holding Hua Eng Wire or generate 103.86% return on investment 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. Hua Eng Wire
Performance |
| Timeline |
| YuantaP shares Taiwan |
| Hua Eng Wire |
YuantaP Shares and Hua Eng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Hua Eng
The main advantage of trading using opposite YuantaP Shares and Hua Eng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Hua Eng 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 Hua Eng will offset losses from the drop in Hua Eng'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 |
| Hua Eng vs. Walsin Lihwa Corp | Hua Eng vs. Ta Ya Electric | Hua Eng vs. Hong Tai Electric | Hua Eng vs. Sampo Corp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |