Correlation Between Yuanta Financial and Kenmec Mechanical
Can any of the company-specific risk be diversified away by investing in both Yuanta Financial and Kenmec Mechanical 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 Kenmec Mechanical 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 Kenmec Mechanical Engineering, you can compare the effects of market volatilities on Yuanta Financial and Kenmec Mechanical 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 Kenmec Mechanical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanta Financial and Kenmec Mechanical.
Diversification Opportunities for Yuanta Financial and Kenmec Mechanical
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Yuanta and Kenmec is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta Financial Holdings and Kenmec Mechanical Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kenmec Mechanical 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 Kenmec Mechanical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kenmec Mechanical has no effect on the direction of Yuanta Financial i.e., Yuanta Financial and Kenmec Mechanical go up and down completely randomly.
Pair Corralation between Yuanta Financial and Kenmec Mechanical
Assuming the 90 days trading horizon Yuanta Financial Holdings is expected to under-perform the Kenmec Mechanical. But the stock apears to be less risky and, when comparing its historical volatility, Yuanta Financial Holdings is 1.85 times less risky than Kenmec Mechanical. The stock trades about -0.05 of its potential returns per unit of risk. The Kenmec Mechanical Engineering is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 8,460 in Kenmec Mechanical Engineering on October 14, 2024 and sell it today you would earn a total of 600.00 from holding Kenmec Mechanical Engineering or generate 7.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuanta Financial Holdings vs. Kenmec Mechanical Engineering
Performance |
| Timeline |
| Yuanta Financial Holdings |
| Kenmec Mechanical |
Yuanta Financial and Kenmec Mechanical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuanta Financial and Kenmec Mechanical
The main advantage of trading using opposite Yuanta Financial and Kenmec Mechanical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuanta Financial position performs unexpectedly, Kenmec Mechanical 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 Kenmec Mechanical will offset losses from the drop in Kenmec Mechanical'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 |
| Kenmec Mechanical vs. Yuanta Financial Holdings | Kenmec Mechanical vs. Prime Oil Chemical | Kenmec Mechanical vs. Mechema Chemicals Int | Kenmec Mechanical vs. Shinkong Synthetic Fiber |
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
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |