Correlation Between Yang Ming and MedFirst Healthcare
Can any of the company-specific risk be diversified away by investing in both Yang Ming and MedFirst Healthcare 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 MedFirst Healthcare 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 MedFirst Healthcare Services, you can compare the effects of market volatilities on Yang Ming and MedFirst Healthcare 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 MedFirst Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and MedFirst Healthcare.
Diversification Opportunities for Yang Ming and MedFirst Healthcare
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Yang and MedFirst is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and MedFirst Healthcare Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MedFirst Healthcare 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 MedFirst Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MedFirst Healthcare has no effect on the direction of Yang Ming i.e., Yang Ming and MedFirst Healthcare go up and down completely randomly.
Pair Corralation between Yang Ming and MedFirst Healthcare
Assuming the 90 days trading horizon Yang Ming Marine is expected to generate 6.51 times more return on investment than MedFirst Healthcare. However, Yang Ming is 6.51 times more volatile than MedFirst Healthcare Services. It trades about 0.13 of its potential returns per unit of risk. MedFirst Healthcare Services is currently generating about -0.2 per unit of risk. If you would invest 6,760 in Yang Ming Marine on August 25, 2024 and sell it today you would earn a total of 990.00 from holding Yang Ming Marine or generate 14.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yang Ming Marine vs. MedFirst Healthcare Services
Performance |
| Timeline |
| Yang Ming Marine |
| MedFirst Healthcare |
Yang Ming and MedFirst Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yang Ming and MedFirst Healthcare
The main advantage of trading using opposite Yang Ming and MedFirst Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, MedFirst Healthcare 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 MedFirst Healthcare will offset losses from the drop in MedFirst Healthcare's long position.| Yang Ming vs. Sunny Friend Environmental | Yang Ming vs. TTET Union Corp | Yang Ming vs. ECOVE Environment Corp | Yang Ming vs. Yulon Finance Corp |
| MedFirst Healthcare vs. Goldsun Building Materials | MedFirst Healthcare vs. HiTi Digital | MedFirst Healthcare vs. YuantaP shares Taiwan Top | MedFirst Healthcare vs. YuantaP shares Taiwan Mid Cap |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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