Correlation Between Yem Chio and Federal Corp
Can any of the company-specific risk be diversified away by investing in both Yem Chio and Federal 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 Yem Chio and Federal Corp 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 Federal Corp, you can compare the effects of market volatilities on Yem Chio and Federal 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 Yem Chio with a short position of Federal Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yem Chio and Federal Corp.
Diversification Opportunities for Yem Chio and Federal Corp
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Yem and Federal is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Yem Chio Co and Federal Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Corp 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 Federal Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Corp has no effect on the direction of Yem Chio i.e., Yem Chio and Federal Corp go up and down completely randomly.
Pair Corralation between Yem Chio and Federal Corp
Assuming the 90 days trading horizon Yem Chio Co is expected to generate 0.99 times more return on investment than Federal Corp. However, Yem Chio Co is 1.01 times less risky than Federal Corp. It trades about 0.04 of its potential returns per unit of risk. Federal Corp is currently generating about 0.01 per unit of risk. If you would invest 1,460 in Yem Chio Co on September 3, 2024 and sell it today you would earn a total of 340.00 from holding Yem Chio Co or generate 23.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yem Chio Co vs. Federal Corp
Performance |
| Timeline |
| Yem Chio |
| Federal Corp |
Yem Chio and Federal Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yem Chio and Federal Corp
The main advantage of trading using opposite Yem Chio and Federal Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yem Chio position performs unexpectedly, Federal 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 Federal Corp will offset losses from the drop in Federal Corp'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 |
| Federal Corp vs. Tainan Spinning Co | Federal Corp vs. Chia Her Industrial | Federal Corp vs. WiseChip Semiconductor | Federal Corp vs. Novatek Microelectronics Corp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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