Correlation Between Wha Yu and Ton Yi
Can any of the company-specific risk be diversified away by investing in both Wha Yu and Ton Yi 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 Wha Yu and Ton Yi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wha Yu Industrial and Ton Yi Industrial, you can compare the effects of market volatilities on Wha Yu and Ton Yi 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 Wha Yu with a short position of Ton Yi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wha Yu and Ton Yi.
Diversification Opportunities for Wha Yu and Ton Yi
Very good diversification
The 3 months correlation between Wha and Ton is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Wha Yu Industrial and Ton Yi Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ton Yi Industrial and Wha Yu 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 Wha Yu Industrial are associated (or correlated) with Ton Yi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ton Yi Industrial has no effect on the direction of Wha Yu i.e., Wha Yu and Ton Yi go up and down completely randomly.
Pair Corralation between Wha Yu and Ton Yi
Assuming the 90 days trading horizon Wha Yu Industrial is expected to generate 1.62 times more return on investment than Ton Yi. However, Wha Yu is 1.62 times more volatile than Ton Yi Industrial. It trades about 0.0 of its potential returns per unit of risk. Ton Yi Industrial is currently generating about -0.01 per unit of risk. If you would invest 2,135 in Wha Yu Industrial on September 3, 2024 and sell it today you would lose (205.00) from holding Wha Yu Industrial or give up 9.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wha Yu Industrial vs. Ton Yi Industrial
Performance |
| Timeline |
| Wha Yu Industrial |
| Ton Yi Industrial |
Wha Yu and Ton Yi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wha Yu and Ton Yi
The main advantage of trading using opposite Wha Yu and Ton Yi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wha Yu position performs unexpectedly, Ton Yi 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 Ton Yi will offset losses from the drop in Ton Yi's long position.| Wha Yu vs. Taiwan Semiconductor Manufacturing | Wha Yu vs. Yang Ming Marine | Wha Yu vs. ASE Industrial Holding | Wha Yu vs. AU Optronics |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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