Correlation Between Huaku Development and Yuanta Financial
Can any of the company-specific risk be diversified away by investing in both Huaku Development and Yuanta Financial 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 Huaku Development and Yuanta Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huaku Development Co and Yuanta Financial Holdings, you can compare the effects of market volatilities on Huaku Development and Yuanta Financial 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 Huaku Development with a short position of Yuanta Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huaku Development and Yuanta Financial.
Diversification Opportunities for Huaku Development and Yuanta Financial
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Huaku and Yuanta is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Huaku Development Co and Yuanta Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuanta Financial Holdings and Huaku Development 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 Huaku Development Co are associated (or correlated) with Yuanta Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuanta Financial Holdings has no effect on the direction of Huaku Development i.e., Huaku Development and Yuanta Financial go up and down completely randomly.
Pair Corralation between Huaku Development and Yuanta Financial
Assuming the 90 days trading horizon Huaku Development is expected to generate 1.06 times less return on investment than Yuanta Financial. In addition to that, Huaku Development is 1.55 times more volatile than Yuanta Financial Holdings. It trades about 0.05 of its total potential returns per unit of risk. Yuanta Financial Holdings is currently generating about 0.07 per unit of volatility. If you would invest 2,210 in Yuanta Financial Holdings on September 3, 2024 and sell it today you would earn a total of 1,115 from holding Yuanta Financial Holdings or generate 50.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huaku Development Co vs. Yuanta Financial Holdings
Performance |
| Timeline |
| Huaku Development |
| Yuanta Financial Holdings |
Huaku Development and Yuanta Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huaku Development and Yuanta Financial
The main advantage of trading using opposite Huaku Development and Yuanta Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huaku Development position performs unexpectedly, Yuanta Financial 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 Yuanta Financial will offset losses from the drop in Yuanta Financial's long position.| Huaku Development vs. Chong Hong Construction | Huaku Development vs. Highwealth Construction Corp | Huaku Development vs. Fubon Financial Holding | Huaku Development vs. CTBC Financial Holding |
| Yuanta Financial vs. Central Reinsurance Corp | Yuanta Financial vs. Huaku Development Co | Yuanta Financial vs. Fubon Financial Holding | Yuanta Financial vs. Chailease Holding 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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