Correlation Between Yem Chio and Hsing Ta
Can any of the company-specific risk be diversified away by investing in both Yem Chio and Hsing Ta 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 Yem Chio and Hsing Ta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yem Chio Co and Hsing Ta Cement, you can compare the effects of market volatilities on Yem Chio and Hsing Ta 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 Yem Chio with a short position of Hsing Ta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yem Chio and Hsing Ta.
Diversification Opportunities for Yem Chio and Hsing Ta
Very weak diversification
The 3 months correlation between Yem and Hsing is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Yem Chio Co and Hsing Ta Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hsing Ta Cement and Yem Chio 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 Yem Chio Co are associated (or correlated) with Hsing Ta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hsing Ta Cement has no effect on the direction of Yem Chio i.e., Yem Chio and Hsing Ta go up and down completely randomly.
Pair Corralation between Yem Chio and Hsing Ta
Assuming the 90 days trading horizon Yem Chio Co is expected to under-perform the Hsing Ta. In addition to that, Yem Chio is 1.87 times more volatile than Hsing Ta Cement. It trades about -0.03 of its total potential returns per unit of risk. Hsing Ta Cement is currently generating about -0.05 per unit of volatility. If you would invest 1,955 in Hsing Ta Cement on November 28, 2024 and sell it today you would lose (165.00) from holding Hsing Ta Cement or give up 8.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yem Chio Co vs. Hsing Ta Cement
Performance |
| Timeline |
| Yem Chio |
| Hsing Ta Cement |
Yem Chio and Hsing Ta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yem Chio and Hsing Ta
The main advantage of trading using opposite Yem Chio and Hsing Ta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yem Chio position performs unexpectedly, Hsing Ta 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 Hsing Ta will offset losses from the drop in Hsing Ta's long position.| Yem Chio vs. USI Corp | Yem Chio vs. Asia Polymer Corp | Yem Chio vs. Sincere Navigation Corp | Yem Chio vs. Lealea Enterprise Co |
| Hsing Ta vs. Universal Cement Corp | Hsing Ta vs. Chia Hsin Cement | Hsing Ta vs. AGV Products Corp | Hsing Ta vs. Grand Pacific Petrochemical |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |