Correlation Between Yang Ming and ITEQ Corp
Can any of the company-specific risk be diversified away by investing in both Yang Ming and ITEQ Corp 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 ITEQ Corp 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 ITEQ Corp, you can compare the effects of market volatilities on Yang Ming and ITEQ Corp 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 ITEQ Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and ITEQ Corp.
Diversification Opportunities for Yang Ming and ITEQ Corp
Weak diversification
The 3 months correlation between Yang and ITEQ is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and ITEQ Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITEQ Corp 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 ITEQ Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITEQ Corp has no effect on the direction of Yang Ming i.e., Yang Ming and ITEQ Corp go up and down completely randomly.
Pair Corralation between Yang Ming and ITEQ Corp
Assuming the 90 days trading horizon Yang Ming Marine is expected to generate 1.07 times more return on investment than ITEQ Corp. However, Yang Ming is 1.07 times more volatile than ITEQ Corp. It trades about 0.09 of its potential returns per unit of risk. ITEQ Corp 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 3,170 from holding Yang Ming Marine or generate 72.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yang Ming Marine vs. ITEQ Corp
Performance |
| Timeline |
| Yang Ming Marine |
| ITEQ Corp |
Yang Ming and ITEQ Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yang Ming and ITEQ Corp
The main advantage of trading using opposite Yang Ming and ITEQ Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, ITEQ Corp 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 ITEQ Corp will offset losses from the drop in ITEQ Corp'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 |
| ITEQ Corp vs. Taiwan Semiconductor Manufacturing | ITEQ Corp vs. Yang Ming Marine | ITEQ Corp vs. AU Optronics | ITEQ Corp 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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