Correlation Between Yang Ming and Everlight Electronics
Can any of the company-specific risk be diversified away by investing in both Yang Ming and Everlight Electronics 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 Everlight Electronics 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 Everlight Electronics Co, you can compare the effects of market volatilities on Yang Ming and Everlight Electronics 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 Everlight Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and Everlight Electronics.
Diversification Opportunities for Yang Ming and Everlight Electronics
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Yang and Everlight is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and Everlight Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everlight Electronics 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 Everlight Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everlight Electronics has no effect on the direction of Yang Ming i.e., Yang Ming and Everlight Electronics go up and down completely randomly.
Pair Corralation between Yang Ming and Everlight Electronics
Assuming the 90 days trading horizon Yang Ming Marine is expected to generate 1.47 times more return on investment than Everlight Electronics. However, Yang Ming is 1.47 times more volatile than Everlight Electronics Co. It trades about 0.07 of its potential returns per unit of risk. Everlight Electronics Co is currently generating about 0.08 per unit of risk. If you would invest 4,840 in Yang Ming Marine on September 12, 2024 and sell it today you would earn a total of 3,210 from holding Yang Ming Marine or generate 66.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.71% |
| Values | Daily Returns |
Yang Ming Marine vs. Everlight Electronics Co
Performance |
| Timeline |
| Yang Ming Marine |
| Everlight Electronics |
Yang Ming and Everlight Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yang Ming and Everlight Electronics
The main advantage of trading using opposite Yang Ming and Everlight Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, Everlight Electronics 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 Everlight Electronics will offset losses from the drop in Everlight Electronics' 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 |
| Everlight Electronics vs. AU Optronics | Everlight Electronics vs. Innolux Corp | Everlight Electronics vs. Ruentex Development Co | Everlight Electronics vs. WiseChip Semiconductor |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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