Correlation Between Yageo Corp and Chi Sheng
Can any of the company-specific risk be diversified away by investing in both Yageo Corp and Chi Sheng 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 Yageo Corp and Chi Sheng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yageo Corp and Chi Sheng Chemical, you can compare the effects of market volatilities on Yageo Corp and Chi Sheng 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 Yageo Corp with a short position of Chi Sheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yageo Corp and Chi Sheng.
Diversification Opportunities for Yageo Corp and Chi Sheng
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yageo and Chi is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Yageo Corp and Chi Sheng Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chi Sheng Chemical and Yageo Corp 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 Yageo Corp are associated (or correlated) with Chi Sheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chi Sheng Chemical has no effect on the direction of Yageo Corp i.e., Yageo Corp and Chi Sheng go up and down completely randomly.
Pair Corralation between Yageo Corp and Chi Sheng
Assuming the 90 days trading horizon Yageo Corp is expected to under-perform the Chi Sheng. In addition to that, Yageo Corp is 3.08 times more volatile than Chi Sheng Chemical. It trades about -0.31 of its total potential returns per unit of risk. Chi Sheng Chemical is currently generating about 0.21 per unit of volatility. If you would invest 2,605 in Chi Sheng Chemical on August 26, 2024 and sell it today you would earn a total of 75.00 from holding Chi Sheng Chemical or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yageo Corp vs. Chi Sheng Chemical
Performance |
| Timeline |
| Yageo Corp |
| Chi Sheng Chemical |
Yageo Corp and Chi Sheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yageo Corp and Chi Sheng
The main advantage of trading using opposite Yageo Corp and Chi Sheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yageo Corp position performs unexpectedly, Chi Sheng 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 Chi Sheng will offset losses from the drop in Chi Sheng's long position.| Yageo Corp vs. Novatek Microelectronics Corp | Yageo Corp vs. Quanta Computer | Yageo Corp vs. United Microelectronics |
| Chi Sheng vs. StShine Optical Co | Chi Sheng vs. Bioteque | Chi Sheng vs. Medeon Biodesign | Chi Sheng vs. SciVision Biotech |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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