Correlation Between Yuanta Daily and Cathay DJIA
Can any of the company-specific risk be diversified away by investing in both Yuanta Daily and Cathay DJIA 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 Cathay DJIA 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 Cathay DJIA Inv, you can compare the effects of market volatilities on Yuanta Daily and Cathay DJIA 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 Cathay DJIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanta Daily and Cathay DJIA.
Diversification Opportunities for Yuanta Daily and Cathay DJIA
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yuanta and Cathay is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta Daily Taiwan and Cathay DJIA Inv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathay DJIA Inv 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 Cathay DJIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathay DJIA Inv has no effect on the direction of Yuanta Daily i.e., Yuanta Daily and Cathay DJIA go up and down completely randomly.
Pair Corralation between Yuanta Daily and Cathay DJIA
Assuming the 90 days trading horizon Yuanta Daily Taiwan is expected to under-perform the Cathay DJIA. In addition to that, Yuanta Daily is 2.56 times more volatile than Cathay DJIA Inv. It trades about -0.12 of its total potential returns per unit of risk. Cathay DJIA Inv is currently generating about -0.27 per unit of volatility. If you would invest 667.00 in Cathay DJIA Inv on August 30, 2024 and sell it today you would lose (34.00) from holding Cathay DJIA Inv or give up 5.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuanta Daily Taiwan vs. Cathay DJIA Inv
Performance |
| Timeline |
| Yuanta Daily Taiwan |
| Cathay DJIA Inv |
Yuanta Daily and Cathay DJIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuanta Daily and Cathay DJIA
The main advantage of trading using opposite Yuanta Daily and Cathay DJIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuanta Daily position performs unexpectedly, Cathay DJIA 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 Cathay DJIA will offset losses from the drop in Cathay DJIA's long position.| Yuanta Daily vs. Symtek Automation Asia | Yuanta Daily vs. CTCI Corp | Yuanta Daily vs. Information Technology Total | Yuanta Daily vs. Kinko Optical Co |
| Cathay DJIA vs. Cathay TIP TAIEX | Cathay DJIA vs. Cathay Nasdaq AI | Cathay DJIA vs. Cathay Dow Jones | Cathay DJIA vs. Cathay Bloomberg Barclays |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |