Correlation Between Yang Ming and Univacco Technology
Can any of the company-specific risk be diversified away by investing in both Yang Ming and Univacco Technology 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 Univacco Technology 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 Univacco Technology, you can compare the effects of market volatilities on Yang Ming and Univacco Technology 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 Univacco Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and Univacco Technology.
Diversification Opportunities for Yang Ming and Univacco Technology
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Yang and Univacco is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and Univacco Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Univacco Technology 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 Univacco Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Univacco Technology has no effect on the direction of Yang Ming i.e., Yang Ming and Univacco Technology go up and down completely randomly.
Pair Corralation between Yang Ming and Univacco Technology
Assuming the 90 days trading horizon Yang Ming Marine is expected to generate 0.52 times more return on investment than Univacco Technology. However, Yang Ming Marine is 1.93 times less risky than Univacco Technology. It trades about 0.17 of its potential returns per unit of risk. Univacco Technology is currently generating about 0.04 per unit of risk. If you would invest 6,640 in Yang Ming Marine on August 31, 2024 and sell it today you would earn a total of 610.00 from holding Yang Ming Marine or generate 9.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yang Ming Marine vs. Univacco Technology
Performance |
| Timeline |
| Yang Ming Marine |
| Univacco Technology |
Yang Ming and Univacco Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yang Ming and Univacco Technology
The main advantage of trading using opposite Yang Ming and Univacco Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, Univacco Technology 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 Univacco Technology will offset losses from the drop in Univacco Technology'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 |
| Univacco Technology vs. Yang Ming Marine | Univacco Technology vs. Wan Hai Lines | Univacco Technology vs. Hsin Kuang Steel | Univacco Technology vs. Evergreen Marine 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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