Correlation Between Yuanta Daily and CTBC TIP
Can any of the company-specific risk be diversified away by investing in both Yuanta Daily and CTBC TIP 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 CTBC TIP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yuanta Daily CSI and CTBC TIP Customized, you can compare the effects of market volatilities on Yuanta Daily and CTBC TIP 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 CTBC TIP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanta Daily and CTBC TIP.
Diversification Opportunities for Yuanta Daily and CTBC TIP
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Yuanta and CTBC is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta Daily CSI and CTBC TIP Customized in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTBC TIP Customized 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 CSI are associated (or correlated) with CTBC TIP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTBC TIP Customized has no effect on the direction of Yuanta Daily i.e., Yuanta Daily and CTBC TIP go up and down completely randomly.
Pair Corralation between Yuanta Daily and CTBC TIP
Assuming the 90 days trading horizon Yuanta Daily CSI is expected to generate 2.43 times more return on investment than CTBC TIP. However, Yuanta Daily is 2.43 times more volatile than CTBC TIP Customized. It trades about 0.0 of its potential returns per unit of risk. CTBC TIP Customized is currently generating about -0.17 per unit of risk. If you would invest 1,693 in Yuanta Daily CSI on September 12, 2024 and sell it today you would lose (9.00) from holding Yuanta Daily CSI or give up 0.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuanta Daily CSI vs. CTBC TIP Customized
Performance |
| Timeline |
| Yuanta Daily CSI |
| CTBC TIP Customized |
Yuanta Daily and CTBC TIP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuanta Daily and CTBC TIP
The main advantage of trading using opposite Yuanta Daily and CTBC TIP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuanta Daily position performs unexpectedly, CTBC TIP 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 CTBC TIP will offset losses from the drop in CTBC TIP's long position.| Yuanta Daily vs. YuantaP shares Taiwan Top | Yuanta Daily vs. Yuanta Daily Taiwan | Yuanta Daily vs. Cathay Taiwan 5G | Yuanta Daily vs. Cathay Sustainability High |
| CTBC TIP vs. YuantaP shares Taiwan Top | CTBC TIP vs. Yuanta Daily Taiwan | CTBC TIP vs. Cathay Taiwan 5G | CTBC TIP 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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