Correlation Between Paradigm and YuantaP Shares
Can any of the company-specific risk be diversified away by investing in both Paradigm and YuantaP Shares 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 Paradigm and YuantaP Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paradigm SP GSCI and YuantaP shares Taiwan Electronics, you can compare the effects of market volatilities on Paradigm and YuantaP Shares 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 Paradigm with a short position of YuantaP Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paradigm and YuantaP Shares.
Diversification Opportunities for Paradigm and YuantaP Shares
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Paradigm and YuantaP is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Paradigm SP GSCI and YuantaP shares Taiwan Electron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YuantaP shares Taiwan and Paradigm 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 Paradigm SP GSCI are associated (or correlated) with YuantaP Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YuantaP shares Taiwan has no effect on the direction of Paradigm i.e., Paradigm and YuantaP Shares go up and down completely randomly.
Pair Corralation between Paradigm and YuantaP Shares
Assuming the 90 days trading horizon Paradigm is expected to generate 2.37 times less return on investment than YuantaP Shares. In addition to that, Paradigm is 2.25 times more volatile than YuantaP shares Taiwan Electronics. It trades about 0.02 of its total potential returns per unit of risk. YuantaP shares Taiwan Electronics is currently generating about 0.1 per unit of volatility. If you would invest 5,950 in YuantaP shares Taiwan Electronics on August 31, 2024 and sell it today you would earn a total of 3,830 from holding YuantaP shares Taiwan Electronics or generate 64.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Paradigm SP GSCI vs. YuantaP shares Taiwan Electron
Performance |
| Timeline |
| Paradigm SP GSCI |
| YuantaP shares Taiwan |
Paradigm and YuantaP Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paradigm and YuantaP Shares
The main advantage of trading using opposite Paradigm and YuantaP Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paradigm position performs unexpectedly, YuantaP Shares 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 YuantaP Shares will offset losses from the drop in YuantaP Shares' long position.| Paradigm vs. Paradigm SP GSCI | Paradigm vs. CTBC USD Corporate | Paradigm vs. Cathay TIP TAIEX | Paradigm vs. Yuanta Daily SP |
| YuantaP Shares vs. YuantaP shares Taiwan Top | YuantaP Shares vs. YuantaP shares MSCI Taiwan | YuantaP Shares vs. YuantaP shares Taiwan GreTai | YuantaP Shares vs. YuantaP shares SSE50 |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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