Correlation Between Yuanta Daily and Cathay Global
Can any of the company-specific risk be diversified away by investing in both Yuanta Daily and Cathay Global 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 Global 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 Global Autonomous, you can compare the effects of market volatilities on Yuanta Daily and Cathay Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanta Daily and Cathay Global.
Diversification Opportunities for Yuanta Daily and Cathay Global
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Yuanta and Cathay is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta Daily Taiwan and Cathay Global Autonomous in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathay Global Autonomous 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathay Global Autonomous has no effect on the direction of Yuanta Daily i.e., Yuanta Daily and Cathay Global go up and down completely randomly.
Pair Corralation between Yuanta Daily and Cathay Global
Assuming the 90 days trading horizon Yuanta Daily Taiwan is expected to under-perform the Cathay Global. But the etf apears to be less risky and, when comparing its historical volatility, Yuanta Daily Taiwan is 1.53 times less risky than Cathay Global. The etf trades about -0.09 of its potential returns per unit of risk. The Cathay Global Autonomous is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,200 in Cathay Global Autonomous on September 2, 2024 and sell it today you would earn a total of 1,233 from holding Cathay Global Autonomous or generate 102.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuanta Daily Taiwan vs. Cathay Global Autonomous
Performance |
| Timeline |
| Yuanta Daily Taiwan |
| Cathay Global Autonomous |
Yuanta Daily and Cathay Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuanta Daily and Cathay Global
The main advantage of trading using opposite Yuanta Daily and Cathay Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuanta Daily position performs unexpectedly, Cathay Global 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 Global will offset losses from the drop in Cathay Global's long position.| Yuanta Daily vs. Yuanta Daily CSI | Yuanta Daily vs. Fubon FTSE Vietnam | Yuanta Daily vs. Paradigm SP GSCI |
| Cathay Global vs. YuantaP shares Taiwan Top | Cathay Global vs. Yuanta Daily Taiwan | Cathay Global vs. Cathay Taiwan 5G | Cathay Global vs. Yuanta Daily CSI |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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