Correlation Between Yuanta Financial and Nanya Technology
Can any of the company-specific risk be diversified away by investing in both Yuanta Financial and Nanya 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 Yuanta Financial and Nanya Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yuanta Financial Holdings and Nanya Technology Corp, you can compare the effects of market volatilities on Yuanta Financial and Nanya 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 Yuanta Financial with a short position of Nanya Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanta Financial and Nanya Technology.
Diversification Opportunities for Yuanta Financial and Nanya Technology
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yuanta and Nanya is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta Financial Holdings and Nanya Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanya Technology Corp and Yuanta Financial 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 Yuanta Financial Holdings are associated (or correlated) with Nanya Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanya Technology Corp has no effect on the direction of Yuanta Financial i.e., Yuanta Financial and Nanya Technology go up and down completely randomly.
Pair Corralation between Yuanta Financial and Nanya Technology
Assuming the 90 days trading horizon Yuanta Financial Holdings is expected to generate 0.6 times more return on investment than Nanya Technology. However, Yuanta Financial Holdings is 1.65 times less risky than Nanya Technology. It trades about 0.1 of its potential returns per unit of risk. Nanya Technology Corp is currently generating about -0.54 per unit of risk. If you would invest 3,245 in Yuanta Financial Holdings on September 1, 2024 and sell it today you would earn a total of 80.00 from holding Yuanta Financial Holdings or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuanta Financial Holdings vs. Nanya Technology Corp
Performance |
| Timeline |
| Yuanta Financial Holdings |
| Nanya Technology Corp |
Yuanta Financial and Nanya Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuanta Financial and Nanya Technology
The main advantage of trading using opposite Yuanta Financial and Nanya Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuanta Financial position performs unexpectedly, Nanya 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 Nanya Technology will offset losses from the drop in Nanya Technology's long position.| Yuanta Financial vs. CTBC Financial Holding | Yuanta Financial vs. Fubon Financial Holding | Yuanta Financial vs. Cathay Financial Holding | Yuanta Financial vs. Mega Financial Holding |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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