Correlation Between Yuanta Financial and IBF Financial
Can any of the company-specific risk be diversified away by investing in both Yuanta Financial and IBF Financial 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 IBF Financial 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 IBF Financial Holdings, you can compare the effects of market volatilities on Yuanta Financial and IBF Financial 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 IBF Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanta Financial and IBF Financial.
Diversification Opportunities for Yuanta Financial and IBF Financial
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yuanta and IBF is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta Financial Holdings and IBF Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBF Financial Holdings 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 IBF Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBF Financial Holdings has no effect on the direction of Yuanta Financial i.e., Yuanta Financial and IBF Financial go up and down completely randomly.
Pair Corralation between Yuanta Financial and IBF Financial
Assuming the 90 days trading horizon Yuanta Financial Holdings is expected to generate 0.99 times more return on investment than IBF Financial. However, Yuanta Financial Holdings is 1.01 times less risky than IBF Financial. It trades about 0.07 of its potential returns per unit of risk. IBF Financial Holdings is currently generating about 0.05 per unit of risk. If you would invest 2,240 in Yuanta Financial Holdings on August 30, 2024 and sell it today you would earn a total of 1,090 from holding Yuanta Financial Holdings or generate 48.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuanta Financial Holdings vs. IBF Financial Holdings
Performance |
| Timeline |
| Yuanta Financial Holdings |
| IBF Financial Holdings |
Yuanta Financial and IBF Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuanta Financial and IBF Financial
The main advantage of trading using opposite Yuanta Financial and IBF Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuanta Financial position performs unexpectedly, IBF Financial 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 IBF Financial will offset losses from the drop in IBF Financial's long position.| Yuanta Financial vs. Taiwan Secom Co | Yuanta Financial vs. TTET Union Corp | Yuanta Financial vs. China Steel Chemical | Yuanta Financial vs. Taiwan Shin Kong |
| IBF Financial vs. Taiwan Secom Co | IBF Financial vs. TTET Union Corp | IBF Financial vs. China Steel Chemical | IBF Financial vs. Taiwan Shin Kong |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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