Correlation Between Yang Ming and Advanced Analog
Can any of the company-specific risk be diversified away by investing in both Yang Ming and Advanced Analog 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 Advanced Analog 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 Advanced Analog Technology, you can compare the effects of market volatilities on Yang Ming and Advanced Analog 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 Advanced Analog. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and Advanced Analog.
Diversification Opportunities for Yang Ming and Advanced Analog
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yang and Advanced is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and Advanced Analog Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Analog Tech 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 Advanced Analog. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Analog Tech has no effect on the direction of Yang Ming i.e., Yang Ming and Advanced Analog go up and down completely randomly.
Pair Corralation between Yang Ming and Advanced Analog
Assuming the 90 days trading horizon Yang Ming Marine is expected to under-perform the Advanced Analog. But the stock apears to be less risky and, when comparing its historical volatility, Yang Ming Marine is 1.41 times less risky than Advanced Analog. The stock trades about -0.27 of its potential returns per unit of risk. The Advanced Analog Technology is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 6,340 in Advanced Analog Technology on October 20, 2024 and sell it today you would lose (360.00) from holding Advanced Analog Technology or give up 5.68% 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. Advanced Analog Technology
Performance |
| Timeline |
| Yang Ming Marine |
| Advanced Analog Tech |
Yang Ming and Advanced Analog Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yang Ming and Advanced Analog
The main advantage of trading using opposite Yang Ming and Advanced Analog positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, Advanced Analog 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 Advanced Analog will offset losses from the drop in Advanced Analog'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 |
| Advanced Analog vs. Jinan Acetate Chemical | Advanced Analog vs. Great China Metal | Advanced Analog vs. Mechema Chemicals Int | Advanced Analog vs. Oceanic Beverages Co |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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