Correlation Between Paradigm and Yuanta Securities
Can any of the company-specific risk be diversified away by investing in both Paradigm and Yuanta Securities 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 Yuanta Securities 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 Yuanta Securities Investment, you can compare the effects of market volatilities on Paradigm and Yuanta Securities 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 Yuanta Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paradigm and Yuanta Securities.
Diversification Opportunities for Paradigm and Yuanta Securities
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Paradigm and Yuanta is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Paradigm SP GSCI and Yuanta Securities Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuanta Securities 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 Yuanta Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuanta Securities has no effect on the direction of Paradigm i.e., Paradigm and Yuanta Securities go up and down completely randomly.
Pair Corralation between Paradigm and Yuanta Securities
Assuming the 90 days trading horizon Paradigm is expected to generate 1.25 times less return on investment than Yuanta Securities. In addition to that, Paradigm is 2.41 times more volatile than Yuanta Securities Investment. It trades about 0.08 of its total potential returns per unit of risk. Yuanta Securities Investment is currently generating about 0.23 per unit of volatility. If you would invest 909.00 in Yuanta Securities Investment on August 31, 2024 and sell it today you would earn a total of 52.00 from holding Yuanta Securities Investment or generate 5.72% 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. Yuanta Securities Investment
Performance |
| Timeline |
| Paradigm SP GSCI |
| Yuanta Securities |
Paradigm and Yuanta Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paradigm and Yuanta Securities
The main advantage of trading using opposite Paradigm and Yuanta Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paradigm position performs unexpectedly, Yuanta Securities 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 Securities will offset losses from the drop in Yuanta Securities' long position.| Paradigm vs. Paradigm SP GSCI | Paradigm vs. CTBC USD Corporate | Paradigm vs. Cathay TIP TAIEX | Paradigm vs. Yuanta Daily SP |
| Yuanta Securities vs. Yuanta Daily SP | Yuanta Securities vs. Yuanta Securities Investment | Yuanta Securities vs. Yuanta SP GSCI | Yuanta Securities 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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