Correlation Between Yieh Phui and Feng Hsin
Can any of the company-specific risk be diversified away by investing in both Yieh Phui and Feng Hsin 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 Feng Hsin 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 Feng Hsin Steel, you can compare the effects of market volatilities on Yieh Phui and Feng Hsin 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 Feng Hsin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yieh Phui and Feng Hsin.
Diversification Opportunities for Yieh Phui and Feng Hsin
Modest diversification
The 3 months correlation between Yieh and Feng is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Yieh Phui Enterprise and Feng Hsin Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Feng Hsin 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 Feng Hsin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Feng Hsin Steel has no effect on the direction of Yieh Phui i.e., Yieh Phui and Feng Hsin go up and down completely randomly.
Pair Corralation between Yieh Phui and Feng Hsin
Assuming the 90 days trading horizon Yieh Phui is expected to generate 2.46 times less return on investment than Feng Hsin. In addition to that, Yieh Phui is 1.25 times more volatile than Feng Hsin Steel. It trades about 0.01 of its total potential returns per unit of risk. Feng Hsin Steel is currently generating about 0.03 per unit of volatility. If you would invest 6,760 in Feng Hsin Steel on August 25, 2024 and sell it today you would earn a total of 950.00 from holding Feng Hsin Steel or generate 14.05% 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. Feng Hsin Steel
Performance |
| Timeline |
| Yieh Phui Enterprise |
| Feng Hsin Steel |
Yieh Phui and Feng Hsin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yieh Phui and Feng Hsin
The main advantage of trading using opposite Yieh Phui and Feng Hsin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yieh Phui position performs unexpectedly, Feng Hsin 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 Feng Hsin will offset losses from the drop in Feng Hsin'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 |
| Feng Hsin vs. Cheng Shin Rubber | Feng Hsin vs. Taiwan Cement Corp | Feng Hsin vs. China Steel Chemical | Feng Hsin 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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