Correlation Between Chinese Gamer and Yuanta Financial
Can any of the company-specific risk be diversified away by investing in both Chinese Gamer and Yuanta 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 Chinese Gamer and Yuanta Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chinese Gamer International and Yuanta Financial Holdings, you can compare the effects of market volatilities on Chinese Gamer and Yuanta 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 Chinese Gamer with a short position of Yuanta Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chinese Gamer and Yuanta Financial.
Diversification Opportunities for Chinese Gamer and Yuanta Financial
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chinese and Yuanta is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Chinese Gamer International and Yuanta Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuanta Financial Holdings and Chinese Gamer 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 Chinese Gamer International are associated (or correlated) with Yuanta Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuanta Financial Holdings has no effect on the direction of Chinese Gamer i.e., Chinese Gamer and Yuanta Financial go up and down completely randomly.
Pair Corralation between Chinese Gamer and Yuanta Financial
Assuming the 90 days trading horizon Chinese Gamer International is expected to under-perform the Yuanta Financial. But the stock apears to be less risky and, when comparing its historical volatility, Chinese Gamer International is 1.02 times less risky than Yuanta Financial. The stock trades about -0.08 of its potential returns per unit of risk. The Yuanta Financial Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,295 in Yuanta Financial Holdings on October 25, 2024 and sell it today you would earn a total of 165.00 from holding Yuanta Financial Holdings or generate 5.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chinese Gamer International vs. Yuanta Financial Holdings
Performance |
| Timeline |
| Chinese Gamer Intern |
| Yuanta Financial Holdings |
Chinese Gamer and Yuanta Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chinese Gamer and Yuanta Financial
The main advantage of trading using opposite Chinese Gamer and Yuanta Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chinese Gamer position performs unexpectedly, Yuanta 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 Yuanta Financial will offset losses from the drop in Yuanta Financial's long position.| Chinese Gamer vs. Unitech Computer Co | Chinese Gamer vs. RiTdisplay Corp | Chinese Gamer vs. Tainet Communication System | Chinese Gamer vs. Hannstar Display Corp |
| Yuanta Financial vs. CTBC Financial Holding | Yuanta Financial vs. Fubon Financial Holding | Yuanta Financial vs. Cathay Financial Holding | Yuanta Financial vs. Mega Financial Holding |
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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