Correlation Between YuantaP Shares and Dow Jones
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Dow Jones 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 Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YuantaP shares MSCI Taiwan and Dow Jones Industrial, you can compare the effects of market volatilities on YuantaP Shares and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Dow Jones.
Diversification Opportunities for YuantaP Shares and Dow Jones
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between YuantaP and Dow is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares MSCI Taiwan and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 MSCI Taiwan are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Dow Jones go up and down completely randomly.
Pair Corralation between YuantaP Shares and Dow Jones
Assuming the 90 days trading horizon YuantaP shares MSCI Taiwan is expected to generate 1.98 times more return on investment than Dow Jones. However, YuantaP Shares is 1.98 times more volatile than Dow Jones Industrial. It trades about 0.12 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.16 per unit of risk. If you would invest 5,925 in YuantaP shares MSCI Taiwan on August 25, 2024 and sell it today you would earn a total of 3,155 from holding YuantaP shares MSCI Taiwan or generate 53.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.15% |
| Values | Daily Returns |
YuantaP shares MSCI Taiwan vs. Dow Jones Industrial
Performance |
| Timeline |
YuantaP Shares and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
YuantaP shares MSCI Taiwan
Pair trading matchups for YuantaP Shares
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with YuantaP Shares and Dow Jones
The main advantage of trading using opposite YuantaP Shares and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| YuantaP Shares vs. YuantaP shares Taiwan Top | YuantaP Shares vs. YuantaP shares Taiwan GreTai | YuantaP Shares vs. YuantaP shares SSE50 | YuantaP Shares vs. YuantaP shares Taiwan Mid Cap |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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