Correlation Between Yuanta Financial and Far Eastern
Can any of the company-specific risk be diversified away by investing in both Yuanta Financial and Far Eastern 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 Far Eastern 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 Far Eastern International, you can compare the effects of market volatilities on Yuanta Financial and Far Eastern 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 Far Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanta Financial and Far Eastern.
Diversification Opportunities for Yuanta Financial and Far Eastern
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yuanta and Far is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta Financial Holdings and Far Eastern International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Far Eastern International 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 Far Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Far Eastern International has no effect on the direction of Yuanta Financial i.e., Yuanta Financial and Far Eastern go up and down completely randomly.
Pair Corralation between Yuanta Financial and Far Eastern
Assuming the 90 days trading horizon Yuanta Financial is expected to generate 1.0 times less return on investment than Far Eastern. In addition to that, Yuanta Financial is 1.31 times more volatile than Far Eastern International. It trades about 0.1 of its total potential returns per unit of risk. Far Eastern International is currently generating about 0.13 per unit of volatility. If you would invest 1,320 in Far Eastern International on September 1, 2024 and sell it today you would earn a total of 35.00 from holding Far Eastern International or generate 2.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Yuanta Financial Holdings vs. Far Eastern International
Performance |
| Timeline |
| Yuanta Financial Holdings |
| Far Eastern International |
Yuanta Financial and Far Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuanta Financial and Far Eastern
The main advantage of trading using opposite Yuanta Financial and Far Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuanta Financial position performs unexpectedly, Far Eastern 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 Far Eastern will offset losses from the drop in Far Eastern'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 |
| Far Eastern vs. Chang Hwa Commercial | Far Eastern vs. Taiwan Business Bank | Far Eastern vs. Sinopac Financial Holdings | Far Eastern vs. Taichung Commercial Bank |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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