Correlation Between Yang Ming and Posiflex Technology
Can any of the company-specific risk be diversified away by investing in both Yang Ming and Posiflex 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 Posiflex 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 Posiflex Technology, you can compare the effects of market volatilities on Yang Ming and Posiflex 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 Posiflex Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and Posiflex Technology.
Diversification Opportunities for Yang Ming and Posiflex Technology
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yang and Posiflex is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and Posiflex Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Posiflex 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 Posiflex Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Posiflex Technology has no effect on the direction of Yang Ming i.e., Yang Ming and Posiflex Technology go up and down completely randomly.
Pair Corralation between Yang Ming and Posiflex Technology
Assuming the 90 days trading horizon Yang Ming is expected to generate 1.79 times less return on investment than Posiflex Technology. In addition to that, Yang Ming is 1.15 times more volatile than Posiflex Technology. It trades about 0.05 of its total potential returns per unit of risk. Posiflex Technology is currently generating about 0.11 per unit of volatility. If you would invest 11,150 in Posiflex Technology on September 3, 2024 and sell it today you would earn a total of 19,900 from holding Posiflex Technology or generate 178.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yang Ming Marine vs. Posiflex Technology
Performance |
| Timeline |
| Yang Ming Marine |
| Posiflex Technology |
Yang Ming and Posiflex Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yang Ming and Posiflex Technology
The main advantage of trading using opposite Yang Ming and Posiflex Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, Posiflex 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 Posiflex Technology will offset losses from the drop in Posiflex 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 |
| Posiflex Technology vs. Taiwan Semiconductor Manufacturing | Posiflex Technology vs. Yang Ming Marine | Posiflex Technology vs. ASE Industrial Holding | Posiflex 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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