Correlation Between CHINA DEVELOPMENT and YuantaP Shares
Can any of the company-specific risk be diversified away by investing in both CHINA DEVELOPMENT and YuantaP Shares 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 CHINA DEVELOPMENT and YuantaP Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA DEVELOPMENT FINANCIAL and YuantaP shares Taiwan Electronics, you can compare the effects of market volatilities on CHINA DEVELOPMENT and YuantaP Shares 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 CHINA DEVELOPMENT with a short position of YuantaP Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA DEVELOPMENT and YuantaP Shares.
Diversification Opportunities for CHINA DEVELOPMENT and YuantaP Shares
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CHINA and YuantaP is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding CHINA DEVELOPMENT FINANCIAL and YuantaP shares Taiwan Electron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YuantaP shares Taiwan and CHINA DEVELOPMENT 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 CHINA DEVELOPMENT FINANCIAL are associated (or correlated) with YuantaP Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YuantaP shares Taiwan has no effect on the direction of CHINA DEVELOPMENT i.e., CHINA DEVELOPMENT and YuantaP Shares go up and down completely randomly.
Pair Corralation between CHINA DEVELOPMENT and YuantaP Shares
Assuming the 90 days trading horizon CHINA DEVELOPMENT is expected to generate 2.98 times less return on investment than YuantaP Shares. But when comparing it to its historical volatility, CHINA DEVELOPMENT FINANCIAL is 3.69 times less risky than YuantaP Shares. It trades about 0.13 of its potential returns per unit of risk. YuantaP shares Taiwan Electronics is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 6,915 in YuantaP shares Taiwan Electronics on September 4, 2024 and sell it today you would earn a total of 3,200 from holding YuantaP shares Taiwan Electronics or generate 46.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA DEVELOPMENT FINANCIAL vs. YuantaP shares Taiwan Electron
Performance |
| Timeline |
| CHINA DEVELOPMENT |
| YuantaP shares Taiwan |
CHINA DEVELOPMENT and YuantaP Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA DEVELOPMENT and YuantaP Shares
The main advantage of trading using opposite CHINA DEVELOPMENT and YuantaP Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA DEVELOPMENT position performs unexpectedly, YuantaP Shares 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 YuantaP Shares will offset losses from the drop in YuantaP Shares' long position.| CHINA DEVELOPMENT vs. Arbor Technology | CHINA DEVELOPMENT vs. China Mobile | CHINA DEVELOPMENT vs. Newretail Co | CHINA DEVELOPMENT vs. Posiflex Technology |
| YuantaP Shares vs. Cathay Taiwan 5G | YuantaP Shares vs. Ruentex Development Co | YuantaP Shares vs. Symtek Automation Asia | YuantaP Shares vs. CTCI Corp |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |