Correlation Between Yuanta Daily and Cathay Koreataiwan
Can any of the company-specific risk be diversified away by investing in both Yuanta Daily and Cathay Koreataiwan 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 Koreataiwan 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 Koreataiwan IT, you can compare the effects of market volatilities on Yuanta Daily and Cathay Koreataiwan 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 Koreataiwan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanta Daily and Cathay Koreataiwan.
Diversification Opportunities for Yuanta Daily and Cathay Koreataiwan
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Yuanta and Cathay is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta Daily Taiwan and Cathay Koreataiwan IT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathay Koreataiwan 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 Koreataiwan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathay Koreataiwan has no effect on the direction of Yuanta Daily i.e., Yuanta Daily and Cathay Koreataiwan go up and down completely randomly.
Pair Corralation between Yuanta Daily and Cathay Koreataiwan
Assuming the 90 days trading horizon Yuanta Daily Taiwan is expected to under-perform the Cathay Koreataiwan. In addition to that, Yuanta Daily is 2.48 times more volatile than Cathay Koreataiwan IT. It trades about -0.13 of its total potential returns per unit of risk. Cathay Koreataiwan IT is currently generating about -0.2 per unit of volatility. If you would invest 3,340 in Cathay Koreataiwan IT on September 3, 2024 and sell it today you would lose (120.00) from holding Cathay Koreataiwan IT or give up 3.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuanta Daily Taiwan vs. Cathay Koreataiwan IT
Performance |
| Timeline |
| Yuanta Daily Taiwan |
| Cathay Koreataiwan |
Yuanta Daily and Cathay Koreataiwan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuanta Daily and Cathay Koreataiwan
The main advantage of trading using opposite Yuanta Daily and Cathay Koreataiwan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuanta Daily position performs unexpectedly, Cathay Koreataiwan 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 Koreataiwan will offset losses from the drop in Cathay Koreataiwan's long position.| Yuanta Daily vs. Yuanta Daily SP | Yuanta Daily vs. Yuanta Securities Investment | Yuanta Daily vs. Yuanta SP GSCI | Yuanta Daily vs. Yuanta Global NexGen |
| Cathay Koreataiwan vs. Cathay TIP TAIEX | Cathay Koreataiwan vs. Cathay Nasdaq AI | Cathay Koreataiwan vs. Cathay Dow Jones | Cathay Koreataiwan 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |