Correlation Between YoungQin International and Hsin Kuang
Can any of the company-specific risk be diversified away by investing in both YoungQin International and Hsin Kuang 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 YoungQin International and Hsin Kuang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YoungQin International Co and Hsin Kuang Steel, you can compare the effects of market volatilities on YoungQin International and Hsin Kuang 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 YoungQin International with a short position of Hsin Kuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of YoungQin International and Hsin Kuang.
Diversification Opportunities for YoungQin International and Hsin Kuang
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between YoungQin and Hsin is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding YoungQin International Co and Hsin Kuang Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hsin Kuang Steel and YoungQin International 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 YoungQin International Co are associated (or correlated) with Hsin Kuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hsin Kuang Steel has no effect on the direction of YoungQin International i.e., YoungQin International and Hsin Kuang go up and down completely randomly.
Pair Corralation between YoungQin International and Hsin Kuang
Assuming the 90 days trading horizon YoungQin International Co is expected to generate 0.75 times more return on investment than Hsin Kuang. However, YoungQin International Co is 1.34 times less risky than Hsin Kuang. It trades about 0.16 of its potential returns per unit of risk. Hsin Kuang Steel is currently generating about -0.33 per unit of risk. If you would invest 9,700 in YoungQin International Co on September 5, 2024 and sell it today you would earn a total of 350.00 from holding YoungQin International Co or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
YoungQin International Co vs. Hsin Kuang Steel
Performance |
| Timeline |
| YoungQin International |
| Hsin Kuang Steel |
YoungQin International and Hsin Kuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YoungQin International and Hsin Kuang
The main advantage of trading using opposite YoungQin International and Hsin Kuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YoungQin International position performs unexpectedly, Hsin Kuang 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 Hsin Kuang will offset losses from the drop in Hsin Kuang's long position.| YoungQin International vs. Hsin Kuang Steel | YoungQin International vs. Taiwan Steel Union | YoungQin International vs. Chia Yi Steel | YoungQin International vs. Camellia Metal 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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