Correlation Between Yong Shun and Tachan Securities
Can any of the company-specific risk be diversified away by investing in both Yong Shun and Tachan Securities 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 Yong Shun and Tachan Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yong Shun Chemical and Tachan Securities Co, you can compare the effects of market volatilities on Yong Shun and Tachan Securities 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 Yong Shun with a short position of Tachan Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yong Shun and Tachan Securities.
Diversification Opportunities for Yong Shun and Tachan Securities
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Yong and Tachan is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Yong Shun Chemical and Tachan Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tachan Securities and Yong Shun 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 Yong Shun Chemical are associated (or correlated) with Tachan Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tachan Securities has no effect on the direction of Yong Shun i.e., Yong Shun and Tachan Securities go up and down completely randomly.
Pair Corralation between Yong Shun and Tachan Securities
Assuming the 90 days trading horizon Yong Shun Chemical is expected to generate 2.8 times more return on investment than Tachan Securities. However, Yong Shun is 2.8 times more volatile than Tachan Securities Co. It trades about 0.02 of its potential returns per unit of risk. Tachan Securities Co is currently generating about 0.03 per unit of risk. If you would invest 1,424 in Yong Shun Chemical on September 14, 2024 and sell it today you would earn a total of 186.00 from holding Yong Shun Chemical or generate 13.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yong Shun Chemical vs. Tachan Securities Co
Performance |
| Timeline |
| Yong Shun Chemical |
| Tachan Securities |
Yong Shun and Tachan Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yong Shun and Tachan Securities
The main advantage of trading using opposite Yong Shun and Tachan Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yong Shun position performs unexpectedly, Tachan Securities 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 Tachan Securities will offset losses from the drop in Tachan Securities' long position.| Yong Shun vs. Standard Foods Corp | Yong Shun vs. TWOWAY Communications | Yong Shun vs. Yuanta Financial Holdings | Yong Shun vs. Chunghwa Telecom Co |
| Tachan Securities vs. Mechema Chemicals Int | Tachan Securities vs. Yong Shun Chemical | Tachan Securities vs. Sports Gear Co | Tachan Securities vs. Taiwan Speciality Chemicals |
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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