Correlation Between YuantaP Shares and China Glaze
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and China Glaze 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 Glaze 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 China Glaze Co, you can compare the effects of market volatilities on YuantaP Shares and China Glaze 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 Glaze. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and China Glaze.
Diversification Opportunities for YuantaP Shares and China Glaze
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between YuantaP and China is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Electron and China Glaze Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Glaze 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 China Glaze. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Glaze has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and China Glaze go up and down completely randomly.
Pair Corralation between YuantaP Shares and China Glaze
Assuming the 90 days trading horizon YuantaP shares Taiwan Electronics is expected to generate 1.16 times more return on investment than China Glaze. However, YuantaP Shares is 1.16 times more volatile than China Glaze Co. It trades about 0.15 of its potential returns per unit of risk. China Glaze Co is currently generating about 0.04 per unit of risk. If you would invest 10,365 in YuantaP shares Taiwan Electronics on November 4, 2024 and sell it today you would earn a total of 365.00 from holding YuantaP shares Taiwan Electronics or generate 3.52% 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 Electron vs. China Glaze Co
Performance |
| Timeline |
| YuantaP shares Taiwan |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| China Glaze |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
YuantaP Shares and China Glaze Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and China Glaze
The main advantage of trading using opposite YuantaP Shares and China Glaze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, China Glaze 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 Glaze will offset losses from the drop in China Glaze's long position.The idea behind YuantaP shares Taiwan Electronics and China Glaze Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |