Correlation Between Yulon and Walsin Lihwa
Can any of the company-specific risk be diversified away by investing in both Yulon and Walsin Lihwa 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 Yulon and Walsin Lihwa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yulon Motor Co and Walsin Lihwa Corp, you can compare the effects of market volatilities on Yulon and Walsin Lihwa 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 Yulon with a short position of Walsin Lihwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulon and Walsin Lihwa.
Diversification Opportunities for Yulon and Walsin Lihwa
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Yulon and Walsin is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Motor Co and Walsin Lihwa Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walsin Lihwa Corp and Yulon 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 Yulon Motor Co are associated (or correlated) with Walsin Lihwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walsin Lihwa Corp has no effect on the direction of Yulon i.e., Yulon and Walsin Lihwa go up and down completely randomly.
Pair Corralation between Yulon and Walsin Lihwa
Assuming the 90 days trading horizon Yulon Motor Co is expected to generate 1.07 times more return on investment than Walsin Lihwa. However, Yulon is 1.07 times more volatile than Walsin Lihwa Corp. It trades about 0.0 of its potential returns per unit of risk. Walsin Lihwa Corp is currently generating about -0.05 per unit of risk. If you would invest 6,230 in Yulon Motor Co on August 30, 2024 and sell it today you would lose (680.00) from holding Yulon Motor Co or give up 10.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yulon Motor Co vs. Walsin Lihwa Corp
Performance |
| Timeline |
| Yulon Motor |
| Walsin Lihwa Corp |
Yulon and Walsin Lihwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yulon and Walsin Lihwa
The main advantage of trading using opposite Yulon and Walsin Lihwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon position performs unexpectedly, Walsin Lihwa 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 Walsin Lihwa will offset losses from the drop in Walsin Lihwa's long position.| Yulon vs. China Motor Corp | Yulon vs. China Steel Corp | Yulon vs. Nan Ya Plastics | Yulon vs. Chang Hwa Commercial |
| Walsin Lihwa vs. Yulon Motor Co | Walsin Lihwa vs. Far Eastern Department | Walsin Lihwa vs. China Steel Corp | Walsin Lihwa vs. Chang Hwa Commercial |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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