Correlation Between Yang Ming and Vate Technology
Can any of the company-specific risk be diversified away by investing in both Yang Ming and Vate 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 Vate 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 Vate Technology Co, you can compare the effects of market volatilities on Yang Ming and Vate 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 Vate Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and Vate Technology.
Diversification Opportunities for Yang Ming and Vate Technology
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yang and Vate is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and Vate Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vate 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 Vate Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vate Technology has no effect on the direction of Yang Ming i.e., Yang Ming and Vate Technology go up and down completely randomly.
Pair Corralation between Yang Ming and Vate Technology
Assuming the 90 days trading horizon Yang Ming Marine is expected to generate 0.87 times more return on investment than Vate Technology. However, Yang Ming Marine is 1.15 times less risky than Vate Technology. It trades about 0.14 of its potential returns per unit of risk. Vate Technology Co is currently generating about 0.1 per unit of risk. If you would invest 7,210 in Yang Ming Marine on September 13, 2024 and sell it today you would earn a total of 650.00 from holding Yang Ming Marine or generate 9.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yang Ming Marine vs. Vate Technology Co
Performance |
| Timeline |
| Yang Ming Marine |
| Vate Technology |
Yang Ming and Vate Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yang Ming and Vate Technology
The main advantage of trading using opposite Yang Ming and Vate Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, Vate 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 Vate Technology will offset losses from the drop in Vate Technology's long position.| Yang Ming vs. Wan Hai Lines | Yang Ming vs. U Ming Marine Transport | Yang Ming vs. Taiwan Navigation Co | Yang Ming vs. China Airlines |
| Vate Technology vs. WIN Semiconductors | Vate Technology vs. GlobalWafers Co | Vate Technology vs. Novatek Microelectronics Corp | Vate Technology vs. Ruentex Development Co |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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