Correlation Between YungShin Global and Abnova Taiwan
Can any of the company-specific risk be diversified away by investing in both YungShin Global and Abnova Taiwan 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 Abnova Taiwan 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 Abnova Taiwan Corp, you can compare the effects of market volatilities on YungShin Global and Abnova Taiwan 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 Abnova Taiwan. Check out your portfolio center. Please also check ongoing floating volatility patterns of YungShin Global and Abnova Taiwan.
Diversification Opportunities for YungShin Global and Abnova Taiwan
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between YungShin and Abnova is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding YungShin Global Holding and Abnova Taiwan Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abnova Taiwan 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 Abnova Taiwan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abnova Taiwan Corp has no effect on the direction of YungShin Global i.e., YungShin Global and Abnova Taiwan go up and down completely randomly.
Pair Corralation between YungShin Global and Abnova Taiwan
Assuming the 90 days trading horizon YungShin Global Holding is expected to under-perform the Abnova Taiwan. But the stock apears to be less risky and, when comparing its historical volatility, YungShin Global Holding is 4.2 times less risky than Abnova Taiwan. The stock trades about -0.39 of its potential returns per unit of risk. The Abnova Taiwan Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,970 in Abnova Taiwan Corp on November 5, 2024 and sell it today you would lose (10.00) from holding Abnova Taiwan Corp or give up 0.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
YungShin Global Holding vs. Abnova Taiwan Corp
Performance |
| Timeline |
| YungShin Global Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Abnova Taiwan Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
YungShin Global and Abnova Taiwan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YungShin Global and Abnova Taiwan
The main advantage of trading using opposite YungShin Global and Abnova Taiwan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YungShin Global position performs unexpectedly, Abnova Taiwan 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 Abnova Taiwan will offset losses from the drop in Abnova Taiwan's long position.The idea behind YungShin Global Holding and Abnova Taiwan Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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