Correlation Between YuantaP Shares and Kao Fong
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Kao Fong 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 Kao Fong 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 Kao Fong Machinery, you can compare the effects of market volatilities on YuantaP Shares and Kao Fong 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 Kao Fong. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Kao Fong.
Diversification Opportunities for YuantaP Shares and Kao Fong
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between YuantaP and Kao is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Electron and Kao Fong Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kao Fong Machinery 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 Kao Fong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kao Fong Machinery has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Kao Fong go up and down completely randomly.
Pair Corralation between YuantaP Shares and Kao Fong
Assuming the 90 days trading horizon YuantaP shares Taiwan Electronics is expected to generate 0.33 times more return on investment than Kao Fong. However, YuantaP shares Taiwan Electronics is 3.03 times less risky than Kao Fong. It trades about 0.04 of its potential returns per unit of risk. Kao Fong Machinery is currently generating about -0.02 per unit of risk. If you would invest 9,765 in YuantaP shares Taiwan Electronics on August 29, 2024 and sell it today you would earn a total of 260.00 from holding YuantaP shares Taiwan Electronics or generate 2.66% 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. Kao Fong Machinery
Performance |
| Timeline |
| YuantaP shares Taiwan |
| Kao Fong Machinery |
YuantaP Shares and Kao Fong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Kao Fong
The main advantage of trading using opposite YuantaP Shares and Kao Fong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Kao Fong 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 Kao Fong will offset losses from the drop in Kao Fong's long position.| YuantaP Shares vs. YuantaP shares Taiwan Top | YuantaP Shares vs. Yuanta Daily Taiwan | YuantaP Shares vs. Symtek Automation Asia | YuantaP Shares vs. CTCI Corp |
| Kao Fong vs. Chailease Holding Co | Kao Fong vs. United Radiant Technology | Kao Fong vs. Univacco Technology | Kao Fong vs. AzureWave Technologies |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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