Correlation Between YuantaP Shares and Wah Lee
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Wah Lee 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 Wah Lee 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 Wah Lee Industrial, you can compare the effects of market volatilities on YuantaP Shares and Wah Lee 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 Wah Lee. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Wah Lee.
Diversification Opportunities for YuantaP Shares and Wah Lee
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between YuantaP and Wah is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Electron and Wah Lee Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wah Lee Industrial 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 Wah Lee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wah Lee Industrial has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Wah Lee go up and down completely randomly.
Pair Corralation between YuantaP Shares and Wah Lee
Assuming the 90 days trading horizon YuantaP shares Taiwan Electronics is expected to generate 0.73 times more return on investment than Wah Lee. However, YuantaP shares Taiwan Electronics is 1.36 times less risky than Wah Lee. It trades about 0.11 of its potential returns per unit of risk. Wah Lee Industrial is currently generating about 0.05 per unit of risk. If you would invest 6,915 in YuantaP shares Taiwan Electronics on August 25, 2024 and sell it today you would earn a total of 3,240 from holding YuantaP shares Taiwan Electronics or generate 46.85% 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. Wah Lee Industrial
Performance |
| Timeline |
| YuantaP shares Taiwan |
| Wah Lee Industrial |
YuantaP Shares and Wah Lee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Wah Lee
The main advantage of trading using opposite YuantaP Shares and Wah Lee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Wah Lee 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 Wah Lee will offset losses from the drop in Wah Lee'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 |
| Wah Lee vs. Huaku Development Co | Wah Lee vs. Topco Scientific Co | Wah Lee vs. Test Research | Wah Lee vs. Shinkong Insurance Co |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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