Correlation Between YungShin Global and Continental Holdings
Can any of the company-specific risk be diversified away by investing in both YungShin Global and Continental Holdings 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 YungShin Global and Continental Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YungShin Global Holding and Continental Holdings Corp, you can compare the effects of market volatilities on YungShin Global and Continental Holdings 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 YungShin Global with a short position of Continental Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of YungShin Global and Continental Holdings.
Diversification Opportunities for YungShin Global and Continental Holdings
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between YungShin and Continental is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding YungShin Global Holding and Continental Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Continental Holdings Corp and YungShin Global 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 YungShin Global Holding are associated (or correlated) with Continental Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Continental Holdings Corp has no effect on the direction of YungShin Global i.e., YungShin Global and Continental Holdings go up and down completely randomly.
Pair Corralation between YungShin Global and Continental Holdings
Assuming the 90 days trading horizon YungShin Global is expected to generate 127.4 times less return on investment than Continental Holdings. But when comparing it to its historical volatility, YungShin Global Holding is 1.33 times less risky than Continental Holdings. It trades about 0.0 of its potential returns per unit of risk. Continental Holdings Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,815 in Continental Holdings Corp on September 1, 2024 and sell it today you would earn a total of 225.00 from holding Continental Holdings Corp or generate 7.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
YungShin Global Holding vs. Continental Holdings Corp
Performance |
| Timeline |
| YungShin Global Holding |
| Continental Holdings Corp |
YungShin Global and Continental Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YungShin Global and Continental Holdings
The main advantage of trading using opposite YungShin Global and Continental Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YungShin Global position performs unexpectedly, Continental Holdings 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 Continental Holdings will offset losses from the drop in Continental Holdings' long position.| YungShin Global vs. Sinphar Pharmaceutical Co | YungShin Global vs. Phytohealth Corp | YungShin Global vs. Excelsior Medical Co | YungShin Global vs. Abnova Taiwan Corp |
| Continental Holdings vs. BES Engineering Co | Continental Holdings vs. Chien Kuo Construction | Continental Holdings vs. Hung Sheng Construction | Continental Holdings vs. YungShin Global 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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