Correlation Between YuantaP Shares and First Steamship
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and First Steamship 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 First Steamship 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 First Steamship Co, you can compare the effects of market volatilities on YuantaP Shares and First Steamship 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 First Steamship. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and First Steamship.
Diversification Opportunities for YuantaP Shares and First Steamship
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between YuantaP and First is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Electron and First Steamship Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Steamship 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 First Steamship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Steamship has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and First Steamship go up and down completely randomly.
Pair Corralation between YuantaP Shares and First Steamship
Assuming the 90 days trading horizon YuantaP shares Taiwan Electronics is expected to generate 0.93 times more return on investment than First Steamship. However, YuantaP shares Taiwan Electronics is 1.08 times less risky than First Steamship. It trades about 0.09 of its potential returns per unit of risk. First Steamship Co is currently generating about -0.01 per unit of risk. If you would invest 6,750 in YuantaP shares Taiwan Electronics on August 26, 2024 and sell it today you would earn a total of 3,405 from holding YuantaP shares Taiwan Electronics or generate 50.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
YuantaP shares Taiwan Electron vs. First Steamship Co
Performance |
| Timeline |
| YuantaP shares Taiwan |
| First Steamship |
YuantaP Shares and First Steamship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and First Steamship
The main advantage of trading using opposite YuantaP Shares and First Steamship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, First Steamship 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 First Steamship will offset losses from the drop in First Steamship's long position.| YuantaP Shares vs. YuantaP shares Taiwan Top | YuantaP Shares vs. Cathay Taiwan 5G | YuantaP Shares vs. Yuanta Daily CSI | YuantaP Shares vs. Fuh Hwa Emerging |
| First Steamship vs. Sincere Navigation Corp | First Steamship vs. Evergreen International Storage | First Steamship vs. Far Eastern Department | First Steamship vs. Hung Sheng Construction |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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