Correlation Between Yang Ming and Microelectronics
Can any of the company-specific risk be diversified away by investing in both Yang Ming and Microelectronics 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 Yang Ming and Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yang Ming Marine and Microelectronics Technology, you can compare the effects of market volatilities on Yang Ming and Microelectronics 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 Yang Ming with a short position of Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and Microelectronics.
Diversification Opportunities for Yang Ming and Microelectronics
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Yang and Microelectronics is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and Microelectronics Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microelectronics Tec and Yang Ming 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 Yang Ming Marine are associated (or correlated) with Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microelectronics Tec has no effect on the direction of Yang Ming i.e., Yang Ming and Microelectronics go up and down completely randomly.
Pair Corralation between Yang Ming and Microelectronics
Assuming the 90 days trading horizon Yang Ming Marine is expected to generate 0.99 times more return on investment than Microelectronics. However, Yang Ming Marine is 1.01 times less risky than Microelectronics. It trades about 0.05 of its potential returns per unit of risk. Microelectronics Technology is currently generating about -0.01 per unit of risk. If you would invest 4,496 in Yang Ming Marine on September 3, 2024 and sell it today you would earn a total of 2,824 from holding Yang Ming Marine or generate 62.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yang Ming Marine vs. Microelectronics Technology
Performance |
| Timeline |
| Yang Ming Marine |
| Microelectronics Tec |
Yang Ming and Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yang Ming and Microelectronics
The main advantage of trading using opposite Yang Ming and Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, Microelectronics 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 Microelectronics will offset losses from the drop in Microelectronics' long position.| Yang Ming vs. Evergreen Marine Corp | Yang Ming vs. Wan Hai Lines | Yang Ming vs. China Airlines | Yang Ming vs. Eva Airways Corp |
| Microelectronics vs. Taiwan Semiconductor Manufacturing | Microelectronics vs. Yang Ming Marine | Microelectronics vs. ASE Industrial Holding | Microelectronics vs. AU Optronics |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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