Correlation Between Yuanta Daily and Yuanta SP
Can any of the company-specific risk be diversified away by investing in both Yuanta Daily and Yuanta SP 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 Yuanta Daily and Yuanta SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yuanta Daily Taiwan and Yuanta SP GSCI, you can compare the effects of market volatilities on Yuanta Daily and Yuanta SP 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 Yuanta Daily with a short position of Yuanta SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanta Daily and Yuanta SP.
Diversification Opportunities for Yuanta Daily and Yuanta SP
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yuanta and Yuanta is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta Daily Taiwan and Yuanta SP GSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuanta SP GSCI and Yuanta Daily 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 Yuanta Daily Taiwan are associated (or correlated) with Yuanta SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuanta SP GSCI has no effect on the direction of Yuanta Daily i.e., Yuanta Daily and Yuanta SP go up and down completely randomly.
Pair Corralation between Yuanta Daily and Yuanta SP
Assuming the 90 days trading horizon Yuanta Daily Taiwan is expected to generate 2.67 times more return on investment than Yuanta SP. However, Yuanta Daily is 2.67 times more volatile than Yuanta SP GSCI. It trades about 0.09 of its potential returns per unit of risk. Yuanta SP GSCI is currently generating about 0.06 per unit of risk. If you would invest 10,120 in Yuanta Daily Taiwan on August 31, 2024 and sell it today you would earn a total of 12,435 from holding Yuanta Daily Taiwan or generate 122.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuanta Daily Taiwan vs. Yuanta SP GSCI
Performance |
| Timeline |
| Yuanta Daily Taiwan |
| Yuanta SP GSCI |
Yuanta Daily and Yuanta SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuanta Daily and Yuanta SP
The main advantage of trading using opposite Yuanta Daily and Yuanta SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuanta Daily position performs unexpectedly, Yuanta SP 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 Yuanta SP will offset losses from the drop in Yuanta SP's long position.| Yuanta Daily vs. Yuanta Daily Taiwan | Yuanta Daily vs. Cathay Taiwan 5G | Yuanta Daily vs. Yuanta Daily CSI | Yuanta Daily vs. Fubon FTSE Vietnam |
| Yuanta SP vs. Yuanta Daily Taiwan | Yuanta SP vs. Cathay Taiwan 5G | Yuanta SP vs. Yuanta Daily CSI | Yuanta SP vs. Fubon FTSE Vietnam |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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