Correlation Between Yang Ming and Pegatron Corp
Can any of the company-specific risk be diversified away by investing in both Yang Ming and Pegatron 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 Pegatron 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 Pegatron Corp, you can compare the effects of market volatilities on Yang Ming and Pegatron 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 Pegatron Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and Pegatron Corp.
Diversification Opportunities for Yang Ming and Pegatron Corp
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yang and Pegatron is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and Pegatron Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pegatron 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 Pegatron Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pegatron Corp has no effect on the direction of Yang Ming i.e., Yang Ming and Pegatron Corp go up and down completely randomly.
Pair Corralation between Yang Ming and Pegatron Corp
Assuming the 90 days trading horizon Yang Ming Marine is expected to generate 1.77 times more return on investment than Pegatron Corp. However, Yang Ming is 1.77 times more volatile than Pegatron Corp. It trades about 0.05 of its potential returns per unit of risk. Pegatron Corp is currently generating about -0.16 per unit of risk. If you would invest 7,050 in Yang Ming Marine on September 3, 2024 and sell it today you would earn a total of 270.00 from holding Yang Ming Marine or generate 3.83% 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. Pegatron Corp
Performance |
| Timeline |
| Yang Ming Marine |
| Pegatron Corp |
Yang Ming and Pegatron Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yang Ming and Pegatron Corp
The main advantage of trading using opposite Yang Ming and Pegatron Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, Pegatron 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 Pegatron Corp will offset losses from the drop in Pegatron 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 |
| Pegatron Corp vs. Taiwan Semiconductor Manufacturing | Pegatron Corp vs. Yang Ming Marine | Pegatron Corp vs. ASE Industrial Holding | Pegatron 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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