Correlation Between Yageo Corp and XAC Automation
Can any of the company-specific risk be diversified away by investing in both Yageo Corp and XAC Automation 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 XAC Automation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yageo Corp and XAC Automation, you can compare the effects of market volatilities on Yageo Corp and XAC Automation 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 XAC Automation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yageo Corp and XAC Automation.
Diversification Opportunities for Yageo Corp and XAC Automation
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yageo and XAC is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Yageo Corp and XAC Automation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XAC Automation 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 XAC Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XAC Automation has no effect on the direction of Yageo Corp i.e., Yageo Corp and XAC Automation go up and down completely randomly.
Pair Corralation between Yageo Corp and XAC Automation
Assuming the 90 days trading horizon Yageo Corp is expected to generate 38.18 times less return on investment than XAC Automation. But when comparing it to its historical volatility, Yageo Corp is 1.16 times less risky than XAC Automation. It trades about 0.0 of its potential returns per unit of risk. XAC Automation is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,270 in XAC Automation on September 14, 2024 and sell it today you would earn a total of 230.00 from holding XAC Automation or generate 10.13% 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. XAC Automation
Performance |
| Timeline |
| Yageo Corp |
| XAC Automation |
Yageo Corp and XAC Automation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yageo Corp and XAC Automation
The main advantage of trading using opposite Yageo Corp and XAC Automation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yageo Corp position performs unexpectedly, XAC Automation 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 XAC Automation will offset losses from the drop in XAC Automation's long position.| Yageo Corp vs. ESUN Financial Holding | Yageo Corp vs. Wei Chuan Foods | Yageo Corp vs. Cathay Financial Holding | Yageo Corp vs. Tai Tung Communication |
| XAC Automation vs. Shuang Bang Industrial | XAC Automation vs. Lian Hwa Foods | XAC Automation vs. Powertech Industrial Co | XAC Automation vs. International CSRC Investment |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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