Correlation Between Yang Ming and D Link
Can any of the company-specific risk be diversified away by investing in both Yang Ming and D Link 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 D Link 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 D Link Corp, you can compare the effects of market volatilities on Yang Ming and D Link 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 D Link. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and D Link.
Diversification Opportunities for Yang Ming and D Link
Very weak diversification
The 3 months correlation between Yang and 2332 is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and D Link Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on D Link Corp 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 D Link. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of D Link Corp has no effect on the direction of Yang Ming i.e., Yang Ming and D Link go up and down completely randomly.
Pair Corralation between Yang Ming and D Link
Assuming the 90 days trading horizon Yang Ming Marine is expected to generate 0.77 times more return on investment than D Link. However, Yang Ming Marine is 1.31 times less risky than D Link. It trades about 0.31 of its potential returns per unit of risk. D Link Corp is currently generating about 0.17 per unit of risk. If you would invest 6,850 in Yang Ming Marine on August 24, 2024 and sell it today you would earn a total of 1,080 from holding Yang Ming Marine or generate 15.77% 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. D Link Corp
Performance |
| Timeline |
| Yang Ming Marine |
| D Link Corp |
Yang Ming and D Link Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yang Ming and D Link
The main advantage of trading using opposite Yang Ming and D Link positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, D Link 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 D Link will offset losses from the drop in D Link's long position.| Yang Ming vs. Sunny Friend Environmental | Yang Ming vs. Taiwan Secom Co | Yang Ming vs. TTET Union Corp | Yang Ming vs. ECOVE Environment Corp |
| D Link vs. Accton Technology Corp | D Link vs. Compal Electronics | D Link vs. Qisda Corp | D Link vs. Macronix International 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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