Correlation Between Taiwan Speciality and Yeou Yih
Can any of the company-specific risk be diversified away by investing in both Taiwan Speciality and Yeou Yih 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 Taiwan Speciality and Yeou Yih into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Speciality Chemicals and Yeou Yih Steel, you can compare the effects of market volatilities on Taiwan Speciality and Yeou Yih 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 Taiwan Speciality with a short position of Yeou Yih. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Speciality and Yeou Yih.
Diversification Opportunities for Taiwan Speciality and Yeou Yih
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Taiwan and Yeou is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Speciality Chemicals and Yeou Yih Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yeou Yih Steel and Taiwan Speciality 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 Taiwan Speciality Chemicals are associated (or correlated) with Yeou Yih. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yeou Yih Steel has no effect on the direction of Taiwan Speciality i.e., Taiwan Speciality and Yeou Yih go up and down completely randomly.
Pair Corralation between Taiwan Speciality and Yeou Yih
Assuming the 90 days trading horizon Taiwan Speciality Chemicals is expected to under-perform the Yeou Yih. In addition to that, Taiwan Speciality is 2.0 times more volatile than Yeou Yih Steel. It trades about -0.11 of its total potential returns per unit of risk. Yeou Yih Steel is currently generating about -0.01 per unit of volatility. If you would invest 1,540 in Yeou Yih Steel on September 13, 2024 and sell it today you would lose (5.00) from holding Yeou Yih Steel or give up 0.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan Speciality Chemicals vs. Yeou Yih Steel
Performance |
| Timeline |
| Taiwan Speciality |
| Yeou Yih Steel |
Taiwan Speciality and Yeou Yih Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Speciality and Yeou Yih
The main advantage of trading using opposite Taiwan Speciality and Yeou Yih positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Speciality position performs unexpectedly, Yeou Yih 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 Yeou Yih will offset losses from the drop in Yeou Yih's long position.| Taiwan Speciality vs. Taiwan Semiconductor Manufacturing | Taiwan Speciality vs. Hon Hai Precision | Taiwan Speciality vs. MediaTek | Taiwan Speciality vs. Chunghwa Telecom Co |
| Yeou Yih vs. BenQ Medical Technology | Yeou Yih vs. Cowealth Medical Holding | Yeou Yih vs. Jia Jie Biomedical | Yeou Yih 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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