Correlation Between Excelsior Medical and Yungshin Construction
Can any of the company-specific risk be diversified away by investing in both Excelsior Medical and Yungshin Construction 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 Excelsior Medical and Yungshin Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Excelsior Medical Co and Yungshin Construction Development, you can compare the effects of market volatilities on Excelsior Medical and Yungshin Construction 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 Excelsior Medical with a short position of Yungshin Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Excelsior Medical and Yungshin Construction.
Diversification Opportunities for Excelsior Medical and Yungshin Construction
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Excelsior and Yungshin is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Excelsior Medical Co and Yungshin Construction Developm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yungshin Construction and Excelsior Medical 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 Excelsior Medical Co are associated (or correlated) with Yungshin Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yungshin Construction has no effect on the direction of Excelsior Medical i.e., Excelsior Medical and Yungshin Construction go up and down completely randomly.
Pair Corralation between Excelsior Medical and Yungshin Construction
Assuming the 90 days trading horizon Excelsior Medical Co is expected to generate 0.09 times more return on investment than Yungshin Construction. However, Excelsior Medical Co is 11.68 times less risky than Yungshin Construction. It trades about -0.03 of its potential returns per unit of risk. Yungshin Construction Development is currently generating about -0.35 per unit of risk. If you would invest 8,690 in Excelsior Medical Co on September 2, 2024 and sell it today you would lose (20.00) from holding Excelsior Medical Co or give up 0.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Excelsior Medical Co vs. Yungshin Construction Developm
Performance |
| Timeline |
| Excelsior Medical |
| Yungshin Construction |
Excelsior Medical and Yungshin Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Excelsior Medical and Yungshin Construction
The main advantage of trading using opposite Excelsior Medical and Yungshin Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Excelsior Medical position performs unexpectedly, Yungshin Construction 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 Yungshin Construction will offset losses from the drop in Yungshin Construction's long position.| Excelsior Medical vs. Taiwan Semiconductor Manufacturing | Excelsior Medical vs. Hon Hai Precision | Excelsior Medical vs. MediaTek | Excelsior Medical vs. Chunghwa Telecom Co |
| Yungshin Construction vs. MedFirst Healthcare Services | Yungshin Construction vs. Excelsior Medical Co | Yungshin Construction vs. CHC Healthcare Group | Yungshin Construction vs. Grand Ocean Retail |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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