Correlation Between Yuan Jen and Asia Vital
Can any of the company-specific risk be diversified away by investing in both Yuan Jen and Asia Vital 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 Asia Vital 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 Asia Vital Components, you can compare the effects of market volatilities on Yuan Jen and Asia Vital 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 Asia Vital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuan Jen and Asia Vital.
Diversification Opportunities for Yuan Jen and Asia Vital
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Yuan and Asia is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Yuan Jen Enterprises and Asia Vital Components in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Vital Components 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 Asia Vital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Vital Components has no effect on the direction of Yuan Jen i.e., Yuan Jen and Asia Vital go up and down completely randomly.
Pair Corralation between Yuan Jen and Asia Vital
Assuming the 90 days trading horizon Yuan Jen Enterprises is expected to under-perform the Asia Vital. But the stock apears to be less risky and, when comparing its historical volatility, Yuan Jen Enterprises is 1.55 times less risky than Asia Vital. The stock trades about -0.23 of its potential returns per unit of risk. The Asia Vital Components is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 62,700 in Asia Vital Components on October 31, 2024 and sell it today you would lose (4,800) from holding Asia Vital Components or give up 7.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuan Jen Enterprises vs. Asia Vital Components
Performance |
| Timeline |
| Yuan Jen Enterprises |
| Asia Vital Components |
Yuan Jen and Asia Vital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuan Jen and Asia Vital
The main advantage of trading using opposite Yuan Jen and Asia Vital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuan Jen position performs unexpectedly, Asia Vital 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 Asia Vital will offset losses from the drop in Asia Vital'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 |
| Asia Vital vs. Asia Optical Co | Asia Vital vs. Novatek Microelectronics Corp | Asia Vital vs. Nan Ya Printed |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |