Correlation Between Yuan Jen and Ampoc Far
Can any of the company-specific risk be diversified away by investing in both Yuan Jen and Ampoc Far 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 Ampoc Far 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 Ampoc Far East Co, you can compare the effects of market volatilities on Yuan Jen and Ampoc Far 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 Ampoc Far. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuan Jen and Ampoc Far.
Diversification Opportunities for Yuan Jen and Ampoc Far
Poor diversification
The 3 months correlation between Yuan and Ampoc is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Yuan Jen Enterprises and Ampoc Far East Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ampoc Far East 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 Ampoc Far. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ampoc Far East has no effect on the direction of Yuan Jen i.e., Yuan Jen and Ampoc Far go up and down completely randomly.
Pair Corralation between Yuan Jen and Ampoc Far
Assuming the 90 days trading horizon Yuan Jen Enterprises is expected to under-perform the Ampoc Far. In addition to that, Yuan Jen is 1.22 times more volatile than Ampoc Far East Co. It trades about -0.25 of its total potential returns per unit of risk. Ampoc Far East Co is currently generating about 0.01 per unit of volatility. If you would invest 9,760 in Ampoc Far East Co on October 26, 2024 and sell it today you would earn a total of 10.00 from holding Ampoc Far East Co or generate 0.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuan Jen Enterprises vs. Ampoc Far East Co
Performance |
| Timeline |
| Yuan Jen Enterprises |
| Ampoc Far East |
Yuan Jen and Ampoc Far Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuan Jen and Ampoc Far
The main advantage of trading using opposite Yuan Jen and Ampoc Far positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuan Jen position performs unexpectedly, Ampoc Far 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 Ampoc Far will offset losses from the drop in Ampoc Far's 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 |
| Ampoc Far vs. Greatek Electronics | Ampoc Far vs. Stark Technology | Ampoc Far vs. Elan Microelectronics Corp | Ampoc Far vs. Wellell |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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