Correlation Between Yang Ming and Cayenne Entertainment
Can any of the company-specific risk be diversified away by investing in both Yang Ming and Cayenne Entertainment 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 Cayenne Entertainment 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 Cayenne Entertainment Technology, you can compare the effects of market volatilities on Yang Ming and Cayenne Entertainment 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 Cayenne Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and Cayenne Entertainment.
Diversification Opportunities for Yang Ming and Cayenne Entertainment
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yang and Cayenne is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and Cayenne Entertainment Technolo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cayenne Entertainment 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 Cayenne Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cayenne Entertainment has no effect on the direction of Yang Ming i.e., Yang Ming and Cayenne Entertainment go up and down completely randomly.
Pair Corralation between Yang Ming and Cayenne Entertainment
Assuming the 90 days trading horizon Yang Ming Marine is expected to generate 0.72 times more return on investment than Cayenne Entertainment. However, Yang Ming Marine is 1.38 times less risky than Cayenne Entertainment. It trades about 0.25 of its potential returns per unit of risk. Cayenne Entertainment Technology is currently generating about 0.15 per unit of risk. If you would invest 6,810 in Yang Ming Marine on August 28, 2024 and sell it today you would earn a total of 840.00 from holding Yang Ming Marine or generate 12.33% 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. Cayenne Entertainment Technolo
Performance |
| Timeline |
| Yang Ming Marine |
| Cayenne Entertainment |
Yang Ming and Cayenne Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yang Ming and Cayenne Entertainment
The main advantage of trading using opposite Yang Ming and Cayenne Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, Cayenne Entertainment 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 Cayenne Entertainment will offset losses from the drop in Cayenne Entertainment'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 |
| Cayenne Entertainment vs. International Games System | Cayenne Entertainment vs. X Legend Entertainment Co | Cayenne Entertainment vs. Fun Yours Technology |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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