Correlation Between Paradigm and Yuanta Global
Can any of the company-specific risk be diversified away by investing in both Paradigm and Yuanta 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 Paradigm and Yuanta Global 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 Global NexGen, you can compare the effects of market volatilities on Paradigm and Yuanta 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 Paradigm with a short position of Yuanta Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paradigm and Yuanta Global.
Diversification Opportunities for Paradigm and Yuanta Global
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Paradigm and Yuanta is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Paradigm SP GSCI and Yuanta Global NexGen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuanta Global NexGen 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuanta Global NexGen has no effect on the direction of Paradigm i.e., Paradigm and Yuanta Global go up and down completely randomly.
Pair Corralation between Paradigm and Yuanta Global
Assuming the 90 days trading horizon Paradigm is expected to generate 1.05 times less return on investment than Yuanta Global. In addition to that, Paradigm is 2.35 times more volatile than Yuanta Global NexGen. It trades about 0.02 of its total potential returns per unit of risk. Yuanta Global NexGen is currently generating about 0.05 per unit of volatility. If you would invest 2,905 in Yuanta Global NexGen on September 1, 2024 and sell it today you would earn a total of 777.00 from holding Yuanta Global NexGen or generate 26.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Paradigm SP GSCI vs. Yuanta Global NexGen
Performance |
| Timeline |
| Paradigm SP GSCI |
| Yuanta Global NexGen |
Paradigm and Yuanta Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paradigm and Yuanta Global
The main advantage of trading using opposite Paradigm and Yuanta Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paradigm position performs unexpectedly, Yuanta 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 Yuanta Global will offset losses from the drop in Yuanta Global's long position.| Paradigm vs. Paradigm SP GSCI | Paradigm vs. CTBC USD Corporate | Paradigm vs. Cathay TIP TAIEX | Paradigm vs. Yuanta Daily SP |
| Yuanta Global vs. Yuanta Daily Taiwan | Yuanta Global vs. Cathay Taiwan 5G | Yuanta Global vs. Yuanta Daily CSI | Yuanta Global vs. Fubon FTSE Vietnam |
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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