Correlation Between Wan Hai and Yung Zip
Can any of the company-specific risk be diversified away by investing in both Wan Hai and Yung Zip 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 Wan Hai and Yung Zip into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wan Hai Lines and Yung Zip Chemical, you can compare the effects of market volatilities on Wan Hai and Yung Zip 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 Wan Hai with a short position of Yung Zip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wan Hai and Yung Zip.
Diversification Opportunities for Wan Hai and Yung Zip
Very good diversification
The 3 months correlation between Wan and Yung is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Wan Hai Lines and Yung Zip Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yung Zip Chemical and Wan Hai 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 Wan Hai Lines are associated (or correlated) with Yung Zip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yung Zip Chemical has no effect on the direction of Wan Hai i.e., Wan Hai and Yung Zip go up and down completely randomly.
Pair Corralation between Wan Hai and Yung Zip
Assuming the 90 days trading horizon Wan Hai Lines is expected to generate 2.09 times more return on investment than Yung Zip. However, Wan Hai is 2.09 times more volatile than Yung Zip Chemical. It trades about 0.02 of its potential returns per unit of risk. Yung Zip Chemical is currently generating about -0.02 per unit of risk. If you would invest 8,200 in Wan Hai Lines on September 1, 2024 and sell it today you would earn a total of 100.00 from holding Wan Hai Lines or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wan Hai Lines vs. Yung Zip Chemical
Performance |
| Timeline |
| Wan Hai Lines |
| Yung Zip Chemical |
Wan Hai and Yung Zip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wan Hai and Yung Zip
The main advantage of trading using opposite Wan Hai and Yung Zip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wan Hai position performs unexpectedly, Yung Zip 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 Yung Zip will offset losses from the drop in Yung Zip's long position.| Wan Hai vs. BES Engineering Co | Wan Hai vs. Continental Holdings Corp | Wan Hai vs. Kee Tai Properties | Wan Hai vs. Hung Sheng Construction |
| Yung Zip vs. Taiwan Semiconductor Manufacturing | Yung Zip vs. Hon Hai Precision | Yung Zip vs. MediaTek | Yung Zip vs. Chunghwa Telecom Co |
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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