Correlation Between Ma Kuang and Yageo Corp
Can any of the company-specific risk be diversified away by investing in both Ma Kuang and Yageo Corp 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 Ma Kuang and Yageo Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ma Kuang Healthcare and Yageo Corp, you can compare the effects of market volatilities on Ma Kuang and Yageo Corp 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 Ma Kuang with a short position of Yageo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ma Kuang and Yageo Corp.
Diversification Opportunities for Ma Kuang and Yageo Corp
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 4139 and Yageo is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ma Kuang Healthcare and Yageo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yageo Corp and Ma Kuang 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 Ma Kuang Healthcare are associated (or correlated) with Yageo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yageo Corp has no effect on the direction of Ma Kuang i.e., Ma Kuang and Yageo Corp go up and down completely randomly.
Pair Corralation between Ma Kuang and Yageo Corp
Assuming the 90 days trading horizon Ma Kuang is expected to generate 2.14 times less return on investment than Yageo Corp. In addition to that, Ma Kuang is 1.1 times more volatile than Yageo Corp. It trades about 0.03 of its total potential returns per unit of risk. Yageo Corp is currently generating about 0.06 per unit of volatility. If you would invest 52,600 in Yageo Corp on October 13, 2024 and sell it today you would earn a total of 1,000.00 from holding Yageo Corp or generate 1.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ma Kuang Healthcare vs. Yageo Corp
Performance |
| Timeline |
| Ma Kuang Healthcare |
| Yageo Corp |
Ma Kuang and Yageo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ma Kuang and Yageo Corp
The main advantage of trading using opposite Ma Kuang and Yageo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ma Kuang position performs unexpectedly, Yageo Corp 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 Yageo Corp will offset losses from the drop in Yageo Corp's long position.| Ma Kuang vs. Fubon Financial Holding | Ma Kuang vs. Foxconn Technology Co | Ma Kuang vs. YuantaP shares Taiwan Electronics | Ma Kuang vs. YuantaP shares Taiwan Mid Cap |
| Yageo Corp vs. TWOWAY Communications | Yageo Corp vs. HIM International Music | Yageo Corp vs. Ma Kuang Healthcare | Yageo Corp vs. Syscom Computer Engineering |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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