Correlation Between Yieh Phui and Cheng Shin
Can any of the company-specific risk be diversified away by investing in both Yieh Phui and Cheng Shin 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 Cheng Shin 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 Cheng Shin Rubber, you can compare the effects of market volatilities on Yieh Phui and Cheng Shin 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 Cheng Shin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yieh Phui and Cheng Shin.
Diversification Opportunities for Yieh Phui and Cheng Shin
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Yieh and Cheng is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Yieh Phui Enterprise and Cheng Shin Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheng Shin Rubber 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 Cheng Shin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheng Shin Rubber has no effect on the direction of Yieh Phui i.e., Yieh Phui and Cheng Shin go up and down completely randomly.
Pair Corralation between Yieh Phui and Cheng Shin
Assuming the 90 days trading horizon Yieh Phui Enterprise is expected to generate 1.79 times more return on investment than Cheng Shin. However, Yieh Phui is 1.79 times more volatile than Cheng Shin Rubber. It trades about 0.17 of its potential returns per unit of risk. Cheng Shin Rubber is currently generating about 0.14 per unit of risk. If you would invest 1,550 in Yieh Phui Enterprise on November 22, 2024 and sell it today you would earn a total of 110.00 from holding Yieh Phui Enterprise or generate 7.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yieh Phui Enterprise vs. Cheng Shin Rubber
Performance |
| Timeline |
| Yieh Phui Enterprise |
| Cheng Shin Rubber |
Yieh Phui and Cheng Shin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yieh Phui and Cheng Shin
The main advantage of trading using opposite Yieh Phui and Cheng Shin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yieh Phui position performs unexpectedly, Cheng Shin 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 Cheng Shin will offset losses from the drop in Cheng Shin'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 |
| Cheng Shin vs. Uni President Enterprises Corp | Cheng Shin vs. Formosa Chemicals Fibre | Cheng Shin vs. Asia Cement Corp | Cheng Shin vs. Pou Chen 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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