Correlation Between Yieh Phui and Tung Ho
Can any of the company-specific risk be diversified away by investing in both Yieh Phui and Tung Ho 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 Yieh Phui and Tung Ho into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yieh Phui Enterprise and Tung Ho Steel, you can compare the effects of market volatilities on Yieh Phui and Tung Ho 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 Yieh Phui with a short position of Tung Ho. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yieh Phui and Tung Ho.
Diversification Opportunities for Yieh Phui and Tung Ho
Modest diversification
The 3 months correlation between Yieh and Tung is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Yieh Phui Enterprise and Tung Ho Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tung Ho Steel and Yieh Phui 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 Yieh Phui Enterprise are associated (or correlated) with Tung Ho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tung Ho Steel has no effect on the direction of Yieh Phui i.e., Yieh Phui and Tung Ho go up and down completely randomly.
Pair Corralation between Yieh Phui and Tung Ho
Assuming the 90 days trading horizon Yieh Phui is expected to generate 5.33 times less return on investment than Tung Ho. In addition to that, Yieh Phui is 1.09 times more volatile than Tung Ho Steel. It trades about 0.01 of its total potential returns per unit of risk. Tung Ho Steel is currently generating about 0.06 per unit of volatility. If you would invest 5,310 in Tung Ho Steel on August 25, 2024 and sell it today you would earn a total of 1,940 from holding Tung Ho Steel or generate 36.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.58% |
| Values | Daily Returns |
Yieh Phui Enterprise vs. Tung Ho Steel
Performance |
| Timeline |
| Yieh Phui Enterprise |
| Tung Ho Steel |
Yieh Phui and Tung Ho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yieh Phui and Tung Ho
The main advantage of trading using opposite Yieh Phui and Tung Ho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yieh Phui position performs unexpectedly, Tung Ho 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 Tung Ho will offset losses from the drop in Tung Ho's long position.| Yieh Phui vs. Chung Hung Steel | Yieh Phui vs. Tung Ho Steel | Yieh Phui vs. Sheng Yu Steel | Yieh Phui vs. China Steel Corp |
| Tung Ho vs. Cheng Shin Rubber | Tung Ho vs. Taiwan Cement Corp | Tung Ho vs. China Steel Chemical | Tung Ho vs. Yulon Motor 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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