Correlation Between Yang Ming and Topoint Technology
Can any of the company-specific risk be diversified away by investing in both Yang Ming and Topoint 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 Topoint 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 Topoint Technology Co, you can compare the effects of market volatilities on Yang Ming and Topoint 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 Topoint Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and Topoint Technology.
Diversification Opportunities for Yang Ming and Topoint Technology
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Yang and Topoint is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and Topoint Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Topoint 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 Topoint Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Topoint Technology has no effect on the direction of Yang Ming i.e., Yang Ming and Topoint Technology go up and down completely randomly.
Pair Corralation between Yang Ming and Topoint Technology
Assuming the 90 days trading horizon Yang Ming Marine is expected to generate 1.26 times more return on investment than Topoint Technology. However, Yang Ming is 1.26 times more volatile than Topoint Technology Co. It trades about 0.05 of its potential returns per unit of risk. Topoint Technology Co is currently generating about 0.03 per unit of risk. If you would invest 4,496 in Yang Ming Marine on September 3, 2024 and sell it today you would earn a total of 2,824 from holding Yang Ming Marine or generate 62.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Yang Ming Marine vs. Topoint Technology Co
Performance |
| Timeline |
| Yang Ming Marine |
| Topoint Technology |
Yang Ming and Topoint Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yang Ming and Topoint Technology
The main advantage of trading using opposite Yang Ming and Topoint Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, Topoint 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 Topoint Technology will offset losses from the drop in Topoint 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 |
| Topoint Technology vs. Taiwan Semiconductor Manufacturing | Topoint Technology vs. Yang Ming Marine | Topoint Technology vs. ASE Industrial Holding | Topoint Technology vs. AU Optronics |
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 Correlations module to find global opportunities by holding instruments from different markets.
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