Correlation Between Yang Ming and Trusval Technology
Can any of the company-specific risk be diversified away by investing in both Yang Ming and Trusval 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 Trusval 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 Trusval Technology Co, you can compare the effects of market volatilities on Yang Ming and Trusval 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 Trusval Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and Trusval Technology.
Diversification Opportunities for Yang Ming and Trusval Technology
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yang and Trusval is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and Trusval Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trusval 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 Trusval Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trusval Technology has no effect on the direction of Yang Ming i.e., Yang Ming and Trusval Technology go up and down completely randomly.
Pair Corralation between Yang Ming and Trusval Technology
Assuming the 90 days trading horizon Yang Ming Marine is expected to generate 1.3 times more return on investment than Trusval Technology. However, Yang Ming is 1.3 times more volatile than Trusval Technology Co. It trades about 0.19 of its potential returns per unit of risk. Trusval Technology Co is currently generating about -0.45 per unit of risk. If you would invest 6,640 in Yang Ming Marine on September 1, 2024 and sell it today you would earn a total of 680.00 from holding Yang Ming Marine or generate 10.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Yang Ming Marine vs. Trusval Technology Co
Performance |
| Timeline |
| Yang Ming Marine |
| Trusval Technology |
Yang Ming and Trusval Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yang Ming and Trusval Technology
The main advantage of trading using opposite Yang Ming and Trusval Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, Trusval 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 Trusval Technology will offset losses from the drop in Trusval Technology'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 |
| Trusval Technology vs. Sunonwealth Electric Machine | Trusval Technology vs. Rechi Precision Co | Trusval Technology vs. Fittech Co | Trusval Technology vs. C Sun Manufacturing |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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