Correlation Between YuantaP Shares and Foxconn Technology
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Foxconn Technology 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 Foxconn Technology 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 Foxconn Technology Co, you can compare the effects of market volatilities on YuantaP Shares and Foxconn Technology 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 Foxconn Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Foxconn Technology.
Diversification Opportunities for YuantaP Shares and Foxconn Technology
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between YuantaP and Foxconn is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Electron and Foxconn Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foxconn Technology 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 Foxconn Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foxconn Technology has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Foxconn Technology go up and down completely randomly.
Pair Corralation between YuantaP Shares and Foxconn Technology
Assuming the 90 days trading horizon YuantaP shares Taiwan Electronics is expected to generate 0.85 times more return on investment than Foxconn Technology. However, YuantaP shares Taiwan Electronics is 1.18 times less risky than Foxconn Technology. It trades about 0.07 of its potential returns per unit of risk. Foxconn Technology Co is currently generating about 0.05 per unit of risk. If you would invest 10,355 in YuantaP shares Taiwan Electronics on October 15, 2024 and sell it today you would earn a total of 155.00 from holding YuantaP shares Taiwan Electronics or generate 1.5% 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. Foxconn Technology Co
Performance |
| Timeline |
| YuantaP shares Taiwan |
| Foxconn Technology |
YuantaP Shares and Foxconn Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Foxconn Technology
The main advantage of trading using opposite YuantaP Shares and Foxconn Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Foxconn Technology 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 Foxconn Technology will offset losses from the drop in Foxconn Technology's long position.| YuantaP Shares vs. YuantaP shares Taiwan Top | YuantaP Shares vs. YuantaP shares MSCI Taiwan | YuantaP Shares vs. YuantaP shares Taiwan GreTai | YuantaP Shares vs. YuantaP shares SSE50 |
| Foxconn Technology vs. Hon Hai Precision | Foxconn Technology vs. Pegatron Corp | Foxconn Technology vs. MediaTek | Foxconn Technology vs. Hon Hai Precision |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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