Correlation Between Yulon Nissan and Feng Tay
Can any of the company-specific risk be diversified away by investing in both Yulon Nissan and Feng Tay 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 Nissan and Feng Tay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yulon Nissan Motor and Feng Tay Enterprises, you can compare the effects of market volatilities on Yulon Nissan and Feng Tay 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 Nissan with a short position of Feng Tay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulon Nissan and Feng Tay.
Diversification Opportunities for Yulon Nissan and Feng Tay
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yulon and Feng is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Nissan Motor and Feng Tay Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Feng Tay Enterprises and Yulon Nissan 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 Nissan Motor are associated (or correlated) with Feng Tay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Feng Tay Enterprises has no effect on the direction of Yulon Nissan i.e., Yulon Nissan and Feng Tay go up and down completely randomly.
Pair Corralation between Yulon Nissan and Feng Tay
Assuming the 90 days trading horizon Yulon Nissan Motor is expected to under-perform the Feng Tay. In addition to that, Yulon Nissan is 1.42 times more volatile than Feng Tay Enterprises. It trades about -0.24 of its total potential returns per unit of risk. Feng Tay Enterprises is currently generating about -0.1 per unit of volatility. If you would invest 13,300 in Feng Tay Enterprises on October 22, 2024 and sell it today you would lose (400.00) from holding Feng Tay Enterprises or give up 3.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yulon Nissan Motor vs. Feng Tay Enterprises
Performance |
| Timeline |
| Yulon Nissan Motor |
| Feng Tay Enterprises |
Yulon Nissan and Feng Tay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yulon Nissan and Feng Tay
The main advantage of trading using opposite Yulon Nissan and Feng Tay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon Nissan position performs unexpectedly, Feng Tay 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 Tay will offset losses from the drop in Feng Tay's long position.| Yulon Nissan vs. Hotai Motor Co | Yulon Nissan vs. Yulon Motor Co | Yulon Nissan vs. Cheng Shin Rubber | Yulon Nissan vs. Formosa Chemicals Fibre |
| Feng Tay vs. Pou Chen Corp | Feng Tay vs. Eclat Textile Co | Feng Tay vs. Hotai Motor Co | Feng Tay vs. Giant Manufacturing 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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