Correlation Between Yuan Jen and Greatek Electronics
Can any of the company-specific risk be diversified away by investing in both Yuan Jen and Greatek Electronics 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 Yuan Jen and Greatek Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yuan Jen Enterprises and Greatek Electronics, you can compare the effects of market volatilities on Yuan Jen and Greatek Electronics 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 Yuan Jen with a short position of Greatek Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuan Jen and Greatek Electronics.
Diversification Opportunities for Yuan Jen and Greatek Electronics
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Yuan and Greatek is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Yuan Jen Enterprises and Greatek Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greatek Electronics and Yuan Jen 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 Yuan Jen Enterprises are associated (or correlated) with Greatek Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greatek Electronics has no effect on the direction of Yuan Jen i.e., Yuan Jen and Greatek Electronics go up and down completely randomly.
Pair Corralation between Yuan Jen and Greatek Electronics
Assuming the 90 days trading horizon Yuan Jen Enterprises is expected to under-perform the Greatek Electronics. In addition to that, Yuan Jen is 1.61 times more volatile than Greatek Electronics. It trades about -0.16 of its total potential returns per unit of risk. Greatek Electronics is currently generating about 0.08 per unit of volatility. If you would invest 5,870 in Greatek Electronics on October 26, 2024 and sell it today you would earn a total of 330.00 from holding Greatek Electronics or generate 5.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuan Jen Enterprises vs. Greatek Electronics
Performance |
| Timeline |
| Yuan Jen Enterprises |
| Greatek Electronics |
Yuan Jen and Greatek Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuan Jen and Greatek Electronics
The main advantage of trading using opposite Yuan Jen and Greatek Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuan Jen position performs unexpectedly, Greatek Electronics 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 Greatek Electronics will offset losses from the drop in Greatek Electronics' long position.| Yuan Jen vs. China Man Made Fiber | Yuan Jen vs. Sinon Corp | Yuan Jen vs. Formosan Union Chemical | Yuan Jen vs. Maywufa Co |
| Greatek Electronics vs. King Yuan Electronics | Greatek Electronics vs. Powertech Technology | Greatek Electronics vs. Realtek Semiconductor Corp | Greatek Electronics vs. Elan Microelectronics 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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