Correlation Between YuantaP Shares and Lungyen Life
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Lungyen Life 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 Lungyen Life 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 Lungyen Life Service, you can compare the effects of market volatilities on YuantaP Shares and Lungyen Life 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 Lungyen Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Lungyen Life.
Diversification Opportunities for YuantaP Shares and Lungyen Life
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between YuantaP and Lungyen is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Electron and Lungyen Life Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lungyen Life Service 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 Lungyen Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lungyen Life Service has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Lungyen Life go up and down completely randomly.
Pair Corralation between YuantaP Shares and Lungyen Life
Assuming the 90 days trading horizon YuantaP shares Taiwan Electronics is expected to generate 0.81 times more return on investment than Lungyen Life. However, YuantaP shares Taiwan Electronics is 1.23 times less risky than Lungyen Life. It trades about 0.07 of its potential returns per unit of risk. Lungyen Life Service is currently generating about -0.17 per unit of risk. If you would invest 10,355 in YuantaP shares Taiwan Electronics on October 15, 2024 and sell it today you would earn a total of 155.00 from holding YuantaP shares Taiwan Electronics or generate 1.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
YuantaP shares Taiwan Electron vs. Lungyen Life Service
Performance |
| Timeline |
| YuantaP shares Taiwan |
| Lungyen Life Service |
YuantaP Shares and Lungyen Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Lungyen Life
The main advantage of trading using opposite YuantaP Shares and Lungyen Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Lungyen Life 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 Lungyen Life will offset losses from the drop in Lungyen Life'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 |
| Lungyen Life vs. Da Lue International | Lungyen Life vs. Foxconn Technology Co | Lungyen Life vs. Fubon Financial Holding | Lungyen Life vs. YuantaP shares Taiwan Top |
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 Stocks Directory module to find actively traded stocks across global markets.
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