Correlation Between Chun Yuan and Yeou Yih
Can any of the company-specific risk be diversified away by investing in both Chun Yuan and Yeou Yih 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 Chun Yuan and Yeou Yih into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chun Yuan Steel and Yeou Yih Steel, you can compare the effects of market volatilities on Chun Yuan and Yeou Yih 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 Chun Yuan with a short position of Yeou Yih. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chun Yuan and Yeou Yih.
Diversification Opportunities for Chun Yuan and Yeou Yih
Very weak diversification
The 3 months correlation between Chun and Yeou is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Chun Yuan Steel and Yeou Yih Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yeou Yih Steel and Chun Yuan 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 Chun Yuan Steel are associated (or correlated) with Yeou Yih. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yeou Yih Steel has no effect on the direction of Chun Yuan i.e., Chun Yuan and Yeou Yih go up and down completely randomly.
Pair Corralation between Chun Yuan and Yeou Yih
Assuming the 90 days trading horizon Chun Yuan Steel is expected to generate 1.07 times more return on investment than Yeou Yih. However, Chun Yuan is 1.07 times more volatile than Yeou Yih Steel. It trades about 0.03 of its potential returns per unit of risk. Yeou Yih Steel is currently generating about 0.02 per unit of risk. If you would invest 1,570 in Chun Yuan Steel on August 30, 2024 and sell it today you would earn a total of 285.00 from holding Chun Yuan Steel or generate 18.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chun Yuan Steel vs. Yeou Yih Steel
Performance |
| Timeline |
| Chun Yuan Steel |
| Yeou Yih Steel |
Chun Yuan and Yeou Yih Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chun Yuan and Yeou Yih
The main advantage of trading using opposite Chun Yuan and Yeou Yih positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chun Yuan position performs unexpectedly, Yeou Yih 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 Yeou Yih will offset losses from the drop in Yeou Yih's long position.| Chun Yuan vs. Hsin Kuang Steel | Chun Yuan vs. Chung Hung Steel | Chun Yuan vs. China Steel Structure | Chun Yuan vs. Feng Hsin Steel |
| Yeou Yih vs. Dadi Early Childhood Education | Yeou Yih vs. Kindom Construction Corp | Yeou Yih vs. Ruentex Engineering Construction | Yeou Yih vs. Chiu Ting Machinery |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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