Correlation Between Yang Ming and Scientech Corp
Can any of the company-specific risk be diversified away by investing in both Yang Ming and Scientech Corp 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 Scientech Corp 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 Scientech Corp, you can compare the effects of market volatilities on Yang Ming and Scientech Corp 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 Scientech Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and Scientech Corp.
Diversification Opportunities for Yang Ming and Scientech Corp
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Yang and Scientech is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and Scientech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scientech Corp 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 Scientech Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scientech Corp has no effect on the direction of Yang Ming i.e., Yang Ming and Scientech Corp go up and down completely randomly.
Pair Corralation between Yang Ming and Scientech Corp
Assuming the 90 days trading horizon Yang Ming is expected to generate 1.41 times less return on investment than Scientech Corp. But when comparing it to its historical volatility, Yang Ming Marine is 1.27 times less risky than Scientech Corp. It trades about 0.08 of its potential returns per unit of risk. Scientech Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 20,400 in Scientech Corp on September 4, 2024 and sell it today you would earn a total of 23,500 from holding Scientech Corp or generate 115.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yang Ming Marine vs. Scientech Corp
Performance |
| Timeline |
| Yang Ming Marine |
| Scientech Corp |
Yang Ming and Scientech Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yang Ming and Scientech Corp
The main advantage of trading using opposite Yang Ming and Scientech Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, Scientech Corp 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 Scientech Corp will offset losses from the drop in Scientech Corp'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 |
| Scientech Corp vs. Taiwan Semiconductor Manufacturing | Scientech Corp vs. Yang Ming Marine | Scientech Corp vs. ASE Industrial Holding | Scientech Corp vs. AU Optronics |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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