Correlation Between Yang Ming and Lion Travel
Can any of the company-specific risk be diversified away by investing in both Yang Ming and Lion Travel 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 Lion Travel 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 Lion Travel Service, you can compare the effects of market volatilities on Yang Ming and Lion Travel 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 Lion Travel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and Lion Travel.
Diversification Opportunities for Yang Ming and Lion Travel
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yang and Lion is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and Lion Travel Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Travel Service 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 Lion Travel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Travel Service has no effect on the direction of Yang Ming i.e., Yang Ming and Lion Travel go up and down completely randomly.
Pair Corralation between Yang Ming and Lion Travel
Assuming the 90 days trading horizon Yang Ming Marine is expected to generate 1.19 times more return on investment than Lion Travel. However, Yang Ming is 1.19 times more volatile than Lion Travel Service. It trades about 0.0 of its potential returns per unit of risk. Lion Travel Service is currently generating about -0.07 per unit of risk. If you would invest 7,590 in Yang Ming Marine on August 31, 2024 and sell it today you would lose (270.00) from holding Yang Ming Marine or give up 3.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yang Ming Marine vs. Lion Travel Service
Performance |
| Timeline |
| Yang Ming Marine |
| Lion Travel Service |
Yang Ming and Lion Travel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yang Ming and Lion Travel
The main advantage of trading using opposite Yang Ming and Lion Travel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, Lion Travel 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 Lion Travel will offset losses from the drop in Lion Travel'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 |
| Lion Travel vs. Eva Airways Corp | Lion Travel vs. Formosa International Hotels | Lion Travel vs. China Airlines | Lion Travel vs. Uni President Enterprises Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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