Correlation Between Yang Ming and Generalplus Technology
Can any of the company-specific risk be diversified away by investing in both Yang Ming and Generalplus Technology 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 Generalplus Technology 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 Generalplus Technology, you can compare the effects of market volatilities on Yang Ming and Generalplus Technology 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 Generalplus Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and Generalplus Technology.
Diversification Opportunities for Yang Ming and Generalplus Technology
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Yang and Generalplus is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and Generalplus Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generalplus Technology 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 Generalplus Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generalplus Technology has no effect on the direction of Yang Ming i.e., Yang Ming and Generalplus Technology go up and down completely randomly.
Pair Corralation between Yang Ming and Generalplus Technology
Assuming the 90 days trading horizon Yang Ming Marine is expected to generate 1.04 times more return on investment than Generalplus Technology. However, Yang Ming is 1.04 times more volatile than Generalplus Technology. It trades about -0.02 of its potential returns per unit of risk. Generalplus Technology is currently generating about -0.08 per unit of risk. If you would invest 8,290 in Yang Ming Marine on September 5, 2024 and sell it today you would lose (720.00) from holding Yang Ming Marine or give up 8.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yang Ming Marine vs. Generalplus Technology
Performance |
| Timeline |
| Yang Ming Marine |
| Generalplus Technology |
Yang Ming and Generalplus Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yang Ming and Generalplus Technology
The main advantage of trading using opposite Yang Ming and Generalplus Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, Generalplus Technology 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 Generalplus Technology will offset losses from the drop in Generalplus Technology'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 |
| Generalplus Technology vs. Taiwan Semiconductor Manufacturing | Generalplus Technology vs. Yang Ming Marine | Generalplus Technology vs. AU Optronics | Generalplus Technology vs. Nan Ya Plastics |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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