Correlation Between Yang Ming and Elitegroup Computer
Can any of the company-specific risk be diversified away by investing in both Yang Ming and Elitegroup Computer 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 Elitegroup Computer 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 Elitegroup Computer Systems, you can compare the effects of market volatilities on Yang Ming and Elitegroup Computer 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 Elitegroup Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and Elitegroup Computer.
Diversification Opportunities for Yang Ming and Elitegroup Computer
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yang and Elitegroup is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and Elitegroup Computer Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elitegroup Computer 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 Elitegroup Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elitegroup Computer has no effect on the direction of Yang Ming i.e., Yang Ming and Elitegroup Computer go up and down completely randomly.
Pair Corralation between Yang Ming and Elitegroup Computer
Assuming the 90 days trading horizon Yang Ming Marine is expected to generate 1.03 times more return on investment than Elitegroup Computer. However, Yang Ming is 1.03 times more volatile than Elitegroup Computer Systems. It trades about 0.05 of its potential returns per unit of risk. Elitegroup Computer Systems is currently generating about 0.02 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yang Ming Marine vs. Elitegroup Computer Systems
Performance |
| Timeline |
| Yang Ming Marine |
| Elitegroup Computer |
Yang Ming and Elitegroup Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yang Ming and Elitegroup Computer
The main advantage of trading using opposite Yang Ming and Elitegroup Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, Elitegroup Computer 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 Elitegroup Computer will offset losses from the drop in Elitegroup Computer's 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 |
| Elitegroup Computer vs. Taiwan Semiconductor Manufacturing | Elitegroup Computer vs. Yang Ming Marine | Elitegroup Computer vs. ASE Industrial Holding | Elitegroup Computer 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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