Correlation Between Yung Chi and TTET Union
Can any of the company-specific risk be diversified away by investing in both Yung Chi and TTET Union 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 Yung Chi and TTET Union into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yung Chi Paint and TTET Union Corp, you can compare the effects of market volatilities on Yung Chi and TTET Union 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 Yung Chi with a short position of TTET Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yung Chi and TTET Union.
Diversification Opportunities for Yung Chi and TTET Union
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Yung and TTET is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Yung Chi Paint and TTET Union Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TTET Union Corp and Yung Chi 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 Yung Chi Paint are associated (or correlated) with TTET Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TTET Union Corp has no effect on the direction of Yung Chi i.e., Yung Chi and TTET Union go up and down completely randomly.
Pair Corralation between Yung Chi and TTET Union
Assuming the 90 days trading horizon Yung Chi is expected to generate 1.24 times less return on investment than TTET Union. But when comparing it to its historical volatility, Yung Chi Paint is 1.05 times less risky than TTET Union. It trades about 0.01 of its potential returns per unit of risk. TTET Union Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 14,300 in TTET Union Corp on September 14, 2024 and sell it today you would earn a total of 250.00 from holding TTET Union Corp or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.62% |
| Values | Daily Returns |
Yung Chi Paint vs. TTET Union Corp
Performance |
| Timeline |
| Yung Chi Paint |
| TTET Union Corp |
Yung Chi and TTET Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yung Chi and TTET Union
The main advantage of trading using opposite Yung Chi and TTET Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yung Chi position performs unexpectedly, TTET Union 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 TTET Union will offset losses from the drop in TTET Union's long position.| Yung Chi vs. China Steel Chemical | Yung Chi vs. Taiwan Secom Co | Yung Chi vs. Standard Foods Corp | Yung Chi vs. Eternal Materials Co |
| TTET Union vs. Standard Foods Corp | TTET Union vs. Uni President Enterprises Corp | TTET Union vs. Great Wall Enterprise | TTET Union vs. Ruentex Development Co |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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