Correlation Between YuantaP Shares and Chenming Mold
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Chenming Mold 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 Chenming Mold 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 Chenming Mold Industrial, you can compare the effects of market volatilities on YuantaP Shares and Chenming Mold 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 Chenming Mold. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Chenming Mold.
Diversification Opportunities for YuantaP Shares and Chenming Mold
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between YuantaP and Chenming is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Electron and Chenming Mold Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chenming Mold 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 Chenming Mold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chenming Mold Industrial has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Chenming Mold go up and down completely randomly.
Pair Corralation between YuantaP Shares and Chenming Mold
Assuming the 90 days trading horizon YuantaP Shares is expected to generate 4.43 times less return on investment than Chenming Mold. But when comparing it to its historical volatility, YuantaP shares Taiwan Electronics is 2.94 times less risky than Chenming Mold. It trades about 0.08 of its potential returns per unit of risk. Chenming Mold Industrial is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,825 in Chenming Mold Industrial on September 2, 2024 and sell it today you would earn a total of 11,775 from holding Chenming Mold Industrial or generate 416.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
YuantaP shares Taiwan Electron vs. Chenming Mold Industrial
Performance |
| Timeline |
| YuantaP shares Taiwan |
| Chenming Mold Industrial |
YuantaP Shares and Chenming Mold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Chenming Mold
The main advantage of trading using opposite YuantaP Shares and Chenming Mold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Chenming Mold 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 Chenming Mold will offset losses from the drop in Chenming Mold's long position.| YuantaP Shares vs. Yuanta Daily Taiwan | YuantaP Shares vs. Yuanta Daily CSI | YuantaP Shares vs. Fubon FTSE Vietnam | YuantaP Shares vs. Fuh Hwa Emerging |
| Chenming Mold vs. Clevo Co | Chenming Mold vs. Zinwell | Chenming Mold vs. Min Aik Technology | Chenming Mold vs. Promise Technology |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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