Correlation Between Sheng Yu and Yieh United
Can any of the company-specific risk be diversified away by investing in both Sheng Yu and Yieh United 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 Sheng Yu and Yieh United into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sheng Yu Steel and Yieh United Steel, you can compare the effects of market volatilities on Sheng Yu and Yieh United 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 Sheng Yu with a short position of Yieh United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sheng Yu and Yieh United.
Diversification Opportunities for Sheng Yu and Yieh United
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sheng and Yieh is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sheng Yu Steel and Yieh United Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yieh United Steel and Sheng Yu 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 Sheng Yu Steel are associated (or correlated) with Yieh United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yieh United Steel has no effect on the direction of Sheng Yu i.e., Sheng Yu and Yieh United go up and down completely randomly.
Pair Corralation between Sheng Yu and Yieh United
Assuming the 90 days trading horizon Sheng Yu Steel is expected to under-perform the Yieh United. But the stock apears to be less risky and, when comparing its historical volatility, Sheng Yu Steel is 1.09 times less risky than Yieh United. The stock trades about -0.17 of its potential returns per unit of risk. The Yieh United Steel is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 650.00 in Yieh United Steel on August 26, 2024 and sell it today you would lose (11.00) from holding Yieh United Steel or give up 1.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sheng Yu Steel vs. Yieh United Steel
Performance |
| Timeline |
| Sheng Yu Steel |
| Yieh United Steel |
Sheng Yu and Yieh United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sheng Yu and Yieh United
The main advantage of trading using opposite Sheng Yu and Yieh United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sheng Yu position performs unexpectedly, Yieh United 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 Yieh United will offset losses from the drop in Yieh United's long position.| Sheng Yu vs. Cheng Shin Rubber | Sheng Yu vs. Taiwan Cement Corp | Sheng Yu vs. China Steel Chemical | Sheng Yu vs. Yulon Motor Co |
| Yieh United vs. Cayenne Entertainment Technology | Yieh United vs. Chunghwa Telecom Co | Yieh United vs. Jia Jie Biomedical | Yieh United vs. Simple Mart Retail |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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