Correlation Between Yang Ming and In Win
Can any of the company-specific risk be diversified away by investing in both Yang Ming and In Win 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 In Win 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 In Win Development, you can compare the effects of market volatilities on Yang Ming and In Win 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 In Win. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and In Win.
Diversification Opportunities for Yang Ming and In Win
Pay attention - limited upside
The 3 months correlation between Yang and 6117 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and In Win Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on In Win Development 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 In Win. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of In Win Development has no effect on the direction of Yang Ming i.e., Yang Ming and In Win go up and down completely randomly.
Pair Corralation between Yang Ming and In Win
Assuming the 90 days trading horizon Yang Ming is expected to generate 3.48 times less return on investment than In Win. But when comparing it to its historical volatility, Yang Ming Marine is 1.63 times less risky than In Win. It trades about 0.05 of its potential returns per unit of risk. In Win Development is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,410 in In Win Development on November 2, 2024 and sell it today you would earn a total of 7,090 from holding In Win Development or generate 502.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yang Ming Marine vs. In Win Development
Performance |
| Timeline |
| Yang Ming Marine |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| In Win Development |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Yang Ming and In Win Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yang Ming and In Win
The main advantage of trading using opposite Yang Ming and In Win positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, In Win 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 In Win will offset losses from the drop in In Win's long position.The idea behind Yang Ming Marine and In Win Development pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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