Correlation Between Xintec and Yuanta Financial
Can any of the company-specific risk be diversified away by investing in both Xintec 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 Xintec and Yuanta Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xintec and Yuanta Financial Holdings, you can compare the effects of market volatilities on Xintec 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 Xintec with a short position of Yuanta Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xintec and Yuanta Financial.
Diversification Opportunities for Xintec and Yuanta Financial
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xintec and Yuanta is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Xintec 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 Xintec 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 Xintec 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 Xintec i.e., Xintec and Yuanta Financial go up and down completely randomly.
Pair Corralation between Xintec and Yuanta Financial
Assuming the 90 days trading horizon Xintec is expected to under-perform the Yuanta Financial. In addition to that, Xintec is 2.53 times more volatile than Yuanta Financial Holdings. It trades about -0.07 of its total potential returns per unit of risk. Yuanta Financial Holdings is currently generating about 0.28 per unit of volatility. If you would invest 3,270 in Yuanta Financial Holdings on September 15, 2024 and sell it today you would earn a total of 235.00 from holding Yuanta Financial Holdings or generate 7.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Xintec vs. Yuanta Financial Holdings
Performance |
| Timeline |
| Xintec |
| Yuanta Financial Holdings |
Xintec and Yuanta Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xintec and Yuanta Financial
The main advantage of trading using opposite Xintec and Yuanta Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xintec 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.| Xintec vs. Yuanta Financial Holdings | Xintec vs. Fubon Financial Holding | Xintec vs. FDC International Hotels | Xintec vs. Taichung Commercial Bank |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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