Correlation Between Yang Ming and Chant Sincere
Can any of the company-specific risk be diversified away by investing in both Yang Ming and Chant Sincere 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 Chant Sincere 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 Chant Sincere Co, you can compare the effects of market volatilities on Yang Ming and Chant Sincere 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 Chant Sincere. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and Chant Sincere.
Diversification Opportunities for Yang Ming and Chant Sincere
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Yang and Chant is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and Chant Sincere Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chant Sincere 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 Chant Sincere. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chant Sincere has no effect on the direction of Yang Ming i.e., Yang Ming and Chant Sincere go up and down completely randomly.
Pair Corralation between Yang Ming and Chant Sincere
Assuming the 90 days trading horizon Yang Ming Marine is expected to generate 1.35 times more return on investment than Chant Sincere. However, Yang Ming is 1.35 times more volatile than Chant Sincere Co. It trades about 0.09 of its potential returns per unit of risk. Chant Sincere Co is currently generating about 0.0 per unit of risk. If you would invest 4,400 in Yang Ming Marine on September 4, 2024 and sell it today you would earn a total of 3,030 from holding Yang Ming Marine or generate 68.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yang Ming Marine vs. Chant Sincere Co
Performance |
| Timeline |
| Yang Ming Marine |
| Chant Sincere |
Yang Ming and Chant Sincere Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yang Ming and Chant Sincere
The main advantage of trading using opposite Yang Ming and Chant Sincere positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, Chant Sincere 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 Chant Sincere will offset losses from the drop in Chant Sincere'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 |
| Chant Sincere vs. Taiwan Semiconductor Manufacturing | Chant Sincere vs. Yang Ming Marine | Chant Sincere vs. AU Optronics | Chant Sincere vs. Innolux Corp |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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