Correlation Between Yang Ming and Leadtek Research
Can any of the company-specific risk be diversified away by investing in both Yang Ming and Leadtek Research 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 Leadtek Research 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 Leadtek Research, you can compare the effects of market volatilities on Yang Ming and Leadtek Research 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 Leadtek Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and Leadtek Research.
Diversification Opportunities for Yang Ming and Leadtek Research
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yang and Leadtek is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and Leadtek Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leadtek Research 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 Leadtek Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leadtek Research has no effect on the direction of Yang Ming i.e., Yang Ming and Leadtek Research go up and down completely randomly.
Pair Corralation between Yang Ming and Leadtek Research
Assuming the 90 days trading horizon Yang Ming is expected to generate 1.44 times less return on investment than Leadtek Research. But when comparing it to its historical volatility, Yang Ming Marine is 1.51 times less risky than Leadtek Research. It trades about 0.07 of its potential returns per unit of risk. Leadtek Research is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,680 in Leadtek Research on September 12, 2024 and sell it today you would earn a total of 3,940 from holding Leadtek Research or generate 107.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Yang Ming Marine vs. Leadtek Research
Performance |
| Timeline |
| Yang Ming Marine |
| Leadtek Research |
Yang Ming and Leadtek Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yang Ming and Leadtek Research
The main advantage of trading using opposite Yang Ming and Leadtek Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, Leadtek Research 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 Leadtek Research will offset losses from the drop in Leadtek Research'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 |
| Leadtek Research vs. Elitegroup Computer Systems | Leadtek Research vs. Gigabyte Technology Co | Leadtek Research vs. Micro Star International Co | Leadtek Research vs. Biostar Microtech International |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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