Correlation Between Yang Ming and Solid State
Can any of the company-specific risk be diversified away by investing in both Yang Ming and Solid State 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 Solid State 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 Solid State System, you can compare the effects of market volatilities on Yang Ming and Solid State 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 Solid State. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and Solid State.
Diversification Opportunities for Yang Ming and Solid State
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yang and Solid is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and Solid State System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solid State System 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 Solid State. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solid State System has no effect on the direction of Yang Ming i.e., Yang Ming and Solid State go up and down completely randomly.
Pair Corralation between Yang Ming and Solid State
Assuming the 90 days trading horizon Yang Ming Marine is expected to generate 1.55 times more return on investment than Solid State. However, Yang Ming is 1.55 times more volatile than Solid State System. It trades about 0.16 of its potential returns per unit of risk. Solid State System is currently generating about -0.42 per unit of risk. If you would invest 7,210 in Yang Ming Marine on September 13, 2024 and sell it today you would earn a total of 710.00 from holding Yang Ming Marine or generate 9.85% 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. Solid State System
Performance |
| Timeline |
| Yang Ming Marine |
| Solid State System |
Yang Ming and Solid State Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yang Ming and Solid State
The main advantage of trading using opposite Yang Ming and Solid State positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, Solid State 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 Solid State will offset losses from the drop in Solid State'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 |
| Solid State vs. Taiwan Speciality Chemicals | Solid State vs. Chunghwa Telecom Co | Solid State vs. Jinan Acetate Chemical | Solid State vs. Arima Communications 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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