Correlation Between Yuanta Financial and Yufo Electronics
Can any of the company-specific risk be diversified away by investing in both Yuanta Financial and Yufo Electronics 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 Yufo Electronics 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 Yufo Electronics Co, you can compare the effects of market volatilities on Yuanta Financial and Yufo Electronics 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 Yufo Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanta Financial and Yufo Electronics.
Diversification Opportunities for Yuanta Financial and Yufo Electronics
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yuanta and Yufo is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta Financial Holdings and Yufo Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yufo Electronics 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 Yufo Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yufo Electronics has no effect on the direction of Yuanta Financial i.e., Yuanta Financial and Yufo Electronics go up and down completely randomly.
Pair Corralation between Yuanta Financial and Yufo Electronics
Assuming the 90 days trading horizon Yuanta Financial is expected to generate 1.8 times less return on investment than Yufo Electronics. In addition to that, Yuanta Financial is 1.47 times more volatile than Yufo Electronics Co. It trades about 0.25 of its total potential returns per unit of risk. Yufo Electronics Co is currently generating about 0.66 per unit of volatility. If you would invest 3,455 in Yufo Electronics Co on November 27, 2024 and sell it today you would earn a total of 265.00 from holding Yufo Electronics Co or generate 7.67% 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. Yufo Electronics Co
Performance |
| Timeline |
| Yuanta Financial Holdings |
| Yufo Electronics |
Yuanta Financial and Yufo Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuanta Financial and Yufo Electronics
The main advantage of trading using opposite Yuanta Financial and Yufo Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuanta Financial position performs unexpectedly, Yufo Electronics 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 Yufo Electronics will offset losses from the drop in Yufo Electronics' 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 |
| Yufo Electronics vs. Logah Technology Corp | Yufo Electronics vs. Min Aik Technology | Yufo Electronics vs. Nova Technology | Yufo Electronics vs. Shinkong Insurance 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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