Correlation Between Cathay Koreataiwan and Yuanta Daily
Can any of the company-specific risk be diversified away by investing in both Cathay Koreataiwan and Yuanta Daily 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 Cathay Koreataiwan and Yuanta Daily into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cathay Koreataiwan IT and Yuanta Daily Taiwan, you can compare the effects of market volatilities on Cathay Koreataiwan and Yuanta Daily 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 Cathay Koreataiwan with a short position of Yuanta Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cathay Koreataiwan and Yuanta Daily.
Diversification Opportunities for Cathay Koreataiwan and Yuanta Daily
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cathay and Yuanta is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Cathay Koreataiwan IT and Yuanta Daily Taiwan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuanta Daily Taiwan and Cathay Koreataiwan 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 Cathay Koreataiwan IT are associated (or correlated) with Yuanta Daily. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuanta Daily Taiwan has no effect on the direction of Cathay Koreataiwan i.e., Cathay Koreataiwan and Yuanta Daily go up and down completely randomly.
Pair Corralation between Cathay Koreataiwan and Yuanta Daily
Assuming the 90 days trading horizon Cathay Koreataiwan IT is expected to under-perform the Yuanta Daily. But the etf apears to be less risky and, when comparing its historical volatility, Cathay Koreataiwan IT is 1.31 times less risky than Yuanta Daily. The etf trades about -0.2 of its potential returns per unit of risk. The Yuanta Daily Taiwan is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 330.00 in Yuanta Daily Taiwan on September 3, 2024 and sell it today you would earn a total of 1.00 from holding Yuanta Daily Taiwan or generate 0.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cathay Koreataiwan IT vs. Yuanta Daily Taiwan
Performance |
| Timeline |
| Cathay Koreataiwan |
| Yuanta Daily Taiwan |
Cathay Koreataiwan and Yuanta Daily Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cathay Koreataiwan and Yuanta Daily
The main advantage of trading using opposite Cathay Koreataiwan and Yuanta Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cathay Koreataiwan position performs unexpectedly, Yuanta Daily 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 Daily will offset losses from the drop in Yuanta Daily's long position.| Cathay Koreataiwan vs. Cathay TIP TAIEX | Cathay Koreataiwan vs. Cathay Nasdaq AI | Cathay Koreataiwan vs. Cathay Dow Jones | Cathay Koreataiwan vs. Cathay Bloomberg Barclays |
| Yuanta Daily vs. Cathay Taiwan 5G | Yuanta Daily vs. Ruentex Development Co | Yuanta Daily vs. Symtek Automation Asia | Yuanta Daily vs. CTCI Corp |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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