Correlation Between Yang Ming and Sinopower Semiconductor
Can any of the company-specific risk be diversified away by investing in both Yang Ming and Sinopower Semiconductor 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 Sinopower Semiconductor 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 Sinopower Semiconductor, you can compare the effects of market volatilities on Yang Ming and Sinopower Semiconductor 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 Sinopower Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and Sinopower Semiconductor.
Diversification Opportunities for Yang Ming and Sinopower Semiconductor
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yang and Sinopower is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and Sinopower Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinopower Semiconductor 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 Sinopower Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinopower Semiconductor has no effect on the direction of Yang Ming i.e., Yang Ming and Sinopower Semiconductor go up and down completely randomly.
Pair Corralation between Yang Ming and Sinopower Semiconductor
Assuming the 90 days trading horizon Yang Ming Marine is expected to under-perform the Sinopower Semiconductor. In addition to that, Yang Ming is 1.27 times more volatile than Sinopower Semiconductor. It trades about -0.25 of its total potential returns per unit of risk. Sinopower Semiconductor is currently generating about 0.04 per unit of volatility. If you would invest 9,590 in Sinopower Semiconductor on October 28, 2024 and sell it today you would earn a total of 110.00 from holding Sinopower Semiconductor or generate 1.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yang Ming Marine vs. Sinopower Semiconductor
Performance |
| Timeline |
| Yang Ming Marine |
| Sinopower Semiconductor |
Yang Ming and Sinopower Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yang Ming and Sinopower Semiconductor
The main advantage of trading using opposite Yang Ming and Sinopower Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, Sinopower Semiconductor 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 Sinopower Semiconductor will offset losses from the drop in Sinopower Semiconductor'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 |
| Sinopower Semiconductor vs. Niko Semiconductor Co | Sinopower Semiconductor vs. Advanced Power Electronics | Sinopower Semiconductor vs. Chipbond Technology | Sinopower Semiconductor vs. WIN Semiconductors |
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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