Correlation Between Yuanta Daily and Paradigm
Can any of the company-specific risk be diversified away by investing in both Yuanta Daily and Paradigm 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 Paradigm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yuanta Daily SP and Paradigm SP GSCI, you can compare the effects of market volatilities on Yuanta Daily and Paradigm 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 Paradigm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanta Daily and Paradigm.
Diversification Opportunities for Yuanta Daily and Paradigm
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Yuanta and Paradigm is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta Daily SP and Paradigm SP GSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paradigm SP GSCI 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 SP are associated (or correlated) with Paradigm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paradigm SP GSCI has no effect on the direction of Yuanta Daily i.e., Yuanta Daily and Paradigm go up and down completely randomly.
Pair Corralation between Yuanta Daily and Paradigm
Assuming the 90 days trading horizon Yuanta Daily SP is expected to generate 0.77 times more return on investment than Paradigm. However, Yuanta Daily SP is 1.3 times less risky than Paradigm. It trades about -0.12 of its potential returns per unit of risk. Paradigm SP GSCI is currently generating about -0.11 per unit of risk. If you would invest 651.00 in Yuanta Daily SP on September 2, 2024 and sell it today you would lose (143.00) from holding Yuanta Daily SP or give up 21.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuanta Daily SP vs. Paradigm SP GSCI
Performance |
| Timeline |
| Yuanta Daily SP |
| Paradigm SP GSCI |
Yuanta Daily and Paradigm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuanta Daily and Paradigm
The main advantage of trading using opposite Yuanta Daily and Paradigm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuanta Daily position performs unexpectedly, Paradigm 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 Paradigm will offset losses from the drop in Paradigm's long position.| Yuanta Daily vs. Yuanta Daily CSI | Yuanta Daily vs. Fubon FTSE Vietnam | Yuanta Daily vs. Paradigm SP GSCI |
| Paradigm vs. Paradigm SP GSCI | Paradigm vs. CTBC USD Corporate | Paradigm vs. Cathay TIP TAIEX | Paradigm vs. Yuanta Daily SP |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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