Correlation Between Yuan Jen and Cyberlink
Can any of the company-specific risk be diversified away by investing in both Yuan Jen and Cyberlink 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 Cyberlink 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 Cyberlink Co, you can compare the effects of market volatilities on Yuan Jen and Cyberlink 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 Cyberlink. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuan Jen and Cyberlink.
Diversification Opportunities for Yuan Jen and Cyberlink
Excellent diversification
The 3 months correlation between Yuan and Cyberlink is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Yuan Jen Enterprises and Cyberlink Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyberlink 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 Cyberlink. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyberlink has no effect on the direction of Yuan Jen i.e., Yuan Jen and Cyberlink go up and down completely randomly.
Pair Corralation between Yuan Jen and Cyberlink
Assuming the 90 days trading horizon Yuan Jen Enterprises is expected to under-perform the Cyberlink. In addition to that, Yuan Jen is 1.3 times more volatile than Cyberlink Co. It trades about -0.06 of its total potential returns per unit of risk. Cyberlink Co is currently generating about 0.01 per unit of volatility. If you would invest 9,790 in Cyberlink Co on October 26, 2024 and sell it today you would lose (70.00) from holding Cyberlink Co or give up 0.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuan Jen Enterprises vs. Cyberlink Co
Performance |
| Timeline |
| Yuan Jen Enterprises |
| Cyberlink |
Yuan Jen and Cyberlink Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuan Jen and Cyberlink
The main advantage of trading using opposite Yuan Jen and Cyberlink positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuan Jen position performs unexpectedly, Cyberlink 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 Cyberlink will offset losses from the drop in Cyberlink'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 |
| Cyberlink vs. Kinsus Interconnect Technology | Cyberlink vs. Topco Scientific Co | Cyberlink vs. Wistron Corp | Cyberlink 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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