Correlation Between YuantaP Shares and Kingstate Electronics
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Kingstate Electronics 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 Kingstate Electronics 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 Kingstate Electronics, you can compare the effects of market volatilities on YuantaP Shares and Kingstate Electronics 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 Kingstate Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Kingstate Electronics.
Diversification Opportunities for YuantaP Shares and Kingstate Electronics
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between YuantaP and Kingstate is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Electron and Kingstate Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingstate Electronics 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 Kingstate Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingstate Electronics has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Kingstate Electronics go up and down completely randomly.
Pair Corralation between YuantaP Shares and Kingstate Electronics
Assuming the 90 days trading horizon YuantaP shares Taiwan Electronics is expected to generate 0.58 times more return on investment than Kingstate Electronics. However, YuantaP shares Taiwan Electronics is 1.72 times less risky than Kingstate Electronics. It trades about -0.26 of its potential returns per unit of risk. Kingstate Electronics is currently generating about -0.3 per unit of risk. If you would invest 10,590 in YuantaP shares Taiwan Electronics on August 24, 2024 and sell it today you would lose (615.00) from holding YuantaP shares Taiwan Electronics or give up 5.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
YuantaP shares Taiwan Electron vs. Kingstate Electronics
Performance |
| Timeline |
| YuantaP shares Taiwan |
| Kingstate Electronics |
YuantaP Shares and Kingstate Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Kingstate Electronics
The main advantage of trading using opposite YuantaP Shares and Kingstate Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Kingstate Electronics 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 Kingstate Electronics will offset losses from the drop in Kingstate Electronics' long position.| YuantaP Shares vs. Yuanta Daily Taiwan | YuantaP Shares vs. Cathay Taiwan 5G | YuantaP Shares vs. Yuanta Daily CSI | YuantaP Shares vs. Cathay Sustainability High |
| Kingstate Electronics vs. Hon Hai Precision | Kingstate Electronics vs. Delta Electronics | Kingstate Electronics vs. LARGAN Precision Co | Kingstate Electronics vs. E Ink Holdings |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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