Correlation Between Yang Ming and TPK Holding
Can any of the company-specific risk be diversified away by investing in both Yang Ming and TPK Holding 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 TPK Holding 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 TPK Holding Co, you can compare the effects of market volatilities on Yang Ming and TPK Holding 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 TPK Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and TPK Holding.
Diversification Opportunities for Yang Ming and TPK Holding
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yang and TPK is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and TPK Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPK Holding 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 TPK Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPK Holding has no effect on the direction of Yang Ming i.e., Yang Ming and TPK Holding go up and down completely randomly.
Pair Corralation between Yang Ming and TPK Holding
Assuming the 90 days trading horizon Yang Ming Marine is expected to generate 1.23 times more return on investment than TPK Holding. However, Yang Ming is 1.23 times more volatile than TPK Holding Co. It trades about 0.08 of its potential returns per unit of risk. TPK Holding Co is currently generating about 0.03 per unit of risk. If you would invest 4,310 in Yang Ming Marine on September 12, 2024 and sell it today you would earn a total of 3,740 from holding Yang Ming Marine or generate 86.77% 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. TPK Holding Co
Performance |
| Timeline |
| Yang Ming Marine |
| TPK Holding |
Yang Ming and TPK Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yang Ming and TPK Holding
The main advantage of trading using opposite Yang Ming and TPK Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, TPK Holding 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 TPK Holding will offset losses from the drop in TPK Holding'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 |
| TPK Holding vs. Catcher Technology Co | TPK Holding vs. Innolux Corp | TPK Holding vs. LARGAN Precision Co | TPK Holding vs. Pegatron 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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