Correlation Between Yuanta Financial and Yong Shun
Can any of the company-specific risk be diversified away by investing in both Yuanta Financial and Yong Shun 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 Yong Shun 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 Yong Shun Chemical, you can compare the effects of market volatilities on Yuanta Financial and Yong Shun 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 Yong Shun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanta Financial and Yong Shun.
Diversification Opportunities for Yuanta Financial and Yong Shun
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yuanta and Yong is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta Financial Holdings and Yong Shun Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yong Shun Chemical 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 Yong Shun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yong Shun Chemical has no effect on the direction of Yuanta Financial i.e., Yuanta Financial and Yong Shun go up and down completely randomly.
Pair Corralation between Yuanta Financial and Yong Shun
Assuming the 90 days trading horizon Yuanta Financial Holdings is expected to generate 1.59 times more return on investment than Yong Shun. However, Yuanta Financial is 1.59 times more volatile than Yong Shun Chemical. It trades about 0.3 of its potential returns per unit of risk. Yong Shun Chemical is currently generating about -0.04 per unit of risk. If you would invest 3,265 in Yuanta Financial Holdings on September 14, 2024 and sell it today you would earn a total of 250.00 from holding Yuanta Financial Holdings or generate 7.66% 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. Yong Shun Chemical
Performance |
| Timeline |
| Yuanta Financial Holdings |
| Yong Shun Chemical |
Yuanta Financial and Yong Shun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuanta Financial and Yong Shun
The main advantage of trading using opposite Yuanta Financial and Yong Shun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuanta Financial position performs unexpectedly, Yong Shun 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 Yong Shun will offset losses from the drop in Yong Shun's long position.| Yuanta Financial vs. Central Reinsurance Corp | Yuanta Financial vs. Huaku Development Co | Yuanta Financial vs. Fubon Financial Holding | Yuanta Financial vs. Chailease Holding Co |
| Yong Shun vs. Standard Foods Corp | Yong Shun vs. TWOWAY Communications | Yong Shun vs. Yuanta Financial Holdings | Yong Shun vs. Chunghwa Telecom 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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