Correlation Between Yuanta Daily and Yuanta STOXX
Can any of the company-specific risk be diversified away by investing in both Yuanta Daily and Yuanta STOXX 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 STOXX 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 STOXX Global, you can compare the effects of market volatilities on Yuanta Daily and Yuanta STOXX 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 STOXX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanta Daily and Yuanta STOXX.
Diversification Opportunities for Yuanta Daily and Yuanta STOXX
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yuanta and Yuanta is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta Daily Taiwan and Yuanta STOXX Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuanta STOXX Global 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 STOXX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuanta STOXX Global has no effect on the direction of Yuanta Daily i.e., Yuanta Daily and Yuanta STOXX go up and down completely randomly.
Pair Corralation between Yuanta Daily and Yuanta STOXX
Assuming the 90 days trading horizon Yuanta Daily Taiwan is expected to under-perform the Yuanta STOXX. In addition to that, Yuanta Daily is 1.44 times more volatile than Yuanta STOXX Global. It trades about -0.1 of its total potential returns per unit of risk. Yuanta STOXX Global is currently generating about 0.21 per unit of volatility. If you would invest 6,580 in Yuanta STOXX Global on September 1, 2024 and sell it today you would earn a total of 450.00 from holding Yuanta STOXX Global or generate 6.84% 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 STOXX Global
Performance |
| Timeline |
| Yuanta Daily Taiwan |
| Yuanta STOXX Global |
Yuanta Daily and Yuanta STOXX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuanta Daily and Yuanta STOXX
The main advantage of trading using opposite Yuanta Daily and Yuanta STOXX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuanta Daily position performs unexpectedly, Yuanta STOXX 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 STOXX will offset losses from the drop in Yuanta STOXX'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 |
| Yuanta STOXX vs. Yuanta Daily SP | Yuanta STOXX vs. Yuanta Securities Investment | Yuanta STOXX vs. Yuanta SP GSCI | Yuanta STOXX vs. Yuanta Global NexGen |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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