Correlation Between Yuanta STOXX and Yuanta Daily
Can any of the company-specific risk be diversified away by investing in both Yuanta STOXX 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 Yuanta STOXX and Yuanta Daily into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yuanta STOXX Global and Yuanta Daily CSI, you can compare the effects of market volatilities on Yuanta STOXX 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 Yuanta STOXX with a short position of Yuanta Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanta STOXX and Yuanta Daily.
Diversification Opportunities for Yuanta STOXX and Yuanta Daily
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yuanta and Yuanta is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta STOXX Global and Yuanta Daily CSI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuanta Daily CSI and Yuanta STOXX 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 STOXX Global 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 CSI has no effect on the direction of Yuanta STOXX i.e., Yuanta STOXX and Yuanta Daily go up and down completely randomly.
Pair Corralation between Yuanta STOXX and Yuanta Daily
Assuming the 90 days trading horizon Yuanta STOXX Global is expected to generate 0.66 times more return on investment than Yuanta Daily. However, Yuanta STOXX Global is 1.52 times less risky than Yuanta Daily. It trades about 0.2 of its potential returns per unit of risk. Yuanta Daily CSI is currently generating about 0.03 per unit of risk. If you would invest 6,580 in Yuanta STOXX Global on August 31, 2024 and sell it today you would earn a total of 450.00 from holding Yuanta STOXX Global or generate 6.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuanta STOXX Global vs. Yuanta Daily CSI
Performance |
| Timeline |
| Yuanta STOXX Global |
| Yuanta Daily CSI |
Yuanta STOXX and Yuanta Daily Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuanta STOXX and Yuanta Daily
The main advantage of trading using opposite Yuanta STOXX and Yuanta Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuanta STOXX 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.| Yuanta STOXX vs. Yuanta Daily Taiwan | Yuanta STOXX vs. Cathay Taiwan 5G | Yuanta STOXX vs. Yuanta Daily CSI | Yuanta STOXX vs. Fubon FTSE Vietnam |
| Yuanta Daily vs. Yuanta Daily Taiwan | Yuanta Daily vs. Cathay Taiwan 5G | Yuanta Daily vs. Fubon FTSE Vietnam | Yuanta Daily vs. Fuh Hwa Emerging |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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