Correlation Between Yang Ming and Kuo Toong
Can any of the company-specific risk be diversified away by investing in both Yang Ming and Kuo Toong 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 Kuo Toong 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 Kuo Toong International, you can compare the effects of market volatilities on Yang Ming and Kuo Toong 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 Kuo Toong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and Kuo Toong.
Diversification Opportunities for Yang Ming and Kuo Toong
Pay attention - limited upside
The 3 months correlation between Yang and Kuo is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and Kuo Toong International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuo Toong International 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 Kuo Toong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuo Toong International has no effect on the direction of Yang Ming i.e., Yang Ming and Kuo Toong go up and down completely randomly.
Pair Corralation between Yang Ming and Kuo Toong
Assuming the 90 days trading horizon Yang Ming Marine is expected to generate 0.92 times more return on investment than Kuo Toong. However, Yang Ming Marine is 1.09 times less risky than Kuo Toong. It trades about 0.22 of its potential returns per unit of risk. Kuo Toong International is currently generating about -0.23 per unit of risk. If you would invest 6,810 in Yang Ming Marine on September 5, 2024 and sell it today you would earn a total of 760.00 from holding Yang Ming Marine or generate 11.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yang Ming Marine vs. Kuo Toong International
Performance |
| Timeline |
| Yang Ming Marine |
| Kuo Toong International |
Yang Ming and Kuo Toong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yang Ming and Kuo Toong
The main advantage of trading using opposite Yang Ming and Kuo Toong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, Kuo Toong 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 Kuo Toong will offset losses from the drop in Kuo Toong'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 |
| Kuo Toong vs. Nankang Rubber Tire | Kuo Toong vs. Rich Development Co | Kuo Toong vs. Kung Sing Engineering | Kuo Toong vs. Advanced Lithium Electrochemistry |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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