Correlation Between YuantaP Shares and Asia Optical
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Asia Optical 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 Asia Optical 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 Asia Optical Co, you can compare the effects of market volatilities on YuantaP Shares and Asia Optical 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 Asia Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Asia Optical.
Diversification Opportunities for YuantaP Shares and Asia Optical
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between YuantaP and Asia is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Electron and Asia Optical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Optical 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 Asia Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Optical has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Asia Optical go up and down completely randomly.
Pair Corralation between YuantaP Shares and Asia Optical
Assuming the 90 days trading horizon YuantaP Shares is expected to generate 2.18 times less return on investment than Asia Optical. But when comparing it to its historical volatility, YuantaP shares Taiwan Electronics is 1.81 times less risky than Asia Optical. It trades about 0.09 of its potential returns per unit of risk. Asia Optical Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 6,700 in Asia Optical Co on November 28, 2024 and sell it today you would earn a total of 13,600 from holding Asia Optical Co or generate 202.99% 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. Asia Optical Co
Performance |
| Timeline |
| YuantaP shares Taiwan |
| Asia Optical |
YuantaP Shares and Asia Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Asia Optical
The main advantage of trading using opposite YuantaP Shares and Asia Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Asia Optical 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 Asia Optical will offset losses from the drop in Asia Optical'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 |
| Asia Optical vs. LARGAN Precision Co | Asia Optical vs. Novatek Microelectronics Corp | Asia Optical vs. Genius Electronic Optical | Asia Optical vs. Catcher Technology 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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