Correlation Between YuantaP Shares and Yem Chio
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Yem Chio 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 Yem Chio 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 Yem Chio Co, you can compare the effects of market volatilities on YuantaP Shares and Yem Chio 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 Yem Chio. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Yem Chio.
Diversification Opportunities for YuantaP Shares and Yem Chio
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between YuantaP and Yem is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Electron and Yem Chio Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yem Chio 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 Yem Chio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yem Chio has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Yem Chio go up and down completely randomly.
Pair Corralation between YuantaP Shares and Yem Chio
Assuming the 90 days trading horizon YuantaP shares Taiwan Electronics is expected to under-perform the Yem Chio. In addition to that, YuantaP Shares is 1.17 times more volatile than Yem Chio Co. It trades about -0.17 of its total potential returns per unit of risk. Yem Chio Co is currently generating about -0.08 per unit of volatility. If you would invest 1,835 in Yem Chio Co on September 1, 2024 and sell it today you would lose (35.00) from holding Yem Chio Co or give up 1.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
YuantaP shares Taiwan Electron vs. Yem Chio Co
Performance |
| Timeline |
| YuantaP shares Taiwan |
| Yem Chio |
YuantaP Shares and Yem Chio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Yem Chio
The main advantage of trading using opposite YuantaP Shares and Yem Chio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Yem Chio 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 Yem Chio will offset losses from the drop in Yem Chio'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 |
| Yem Chio vs. BES Engineering Co | Yem Chio vs. Continental Holdings Corp | Yem Chio vs. Kee Tai Properties | Yem Chio 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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