Correlation Between Yang Ming and Collins
Can any of the company-specific risk be diversified away by investing in both Yang Ming and Collins 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 Collins 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 Collins Co, you can compare the effects of market volatilities on Yang Ming and Collins 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 Collins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and Collins.
Diversification Opportunities for Yang Ming and Collins
Excellent diversification
The 3 months correlation between Yang and Collins is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and Collins Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collins 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 Collins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collins has no effect on the direction of Yang Ming i.e., Yang Ming and Collins go up and down completely randomly.
Pair Corralation between Yang Ming and Collins
Assuming the 90 days trading horizon Yang Ming Marine is expected to generate 1.37 times more return on investment than Collins. However, Yang Ming is 1.37 times more volatile than Collins Co. It trades about 0.05 of its potential returns per unit of risk. Collins Co is currently generating about 0.01 per unit of risk. If you would invest 4,396 in Yang Ming Marine on September 2, 2024 and sell it today you would earn a total of 2,924 from holding Yang Ming Marine or generate 66.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yang Ming Marine vs. Collins Co
Performance |
| Timeline |
| Yang Ming Marine |
| Collins |
Yang Ming and Collins Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yang Ming and Collins
The main advantage of trading using opposite Yang Ming and Collins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, Collins 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 Collins will offset losses from the drop in Collins' 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 |
| Collins vs. Chaintech Technology Corp | Collins vs. Avision | Collins vs. Clevo Co | Collins vs. Elitegroup Computer Systems |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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