Correlation Between K Way and YuantaP Shares
Can any of the company-specific risk be diversified away by investing in both K Way and YuantaP Shares 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 K Way and YuantaP Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between K Way Information and YuantaP shares Taiwan Mid Cap, you can compare the effects of market volatilities on K Way and YuantaP Shares 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 K Way with a short position of YuantaP Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of K Way and YuantaP Shares.
Diversification Opportunities for K Way and YuantaP Shares
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 5201 and YuantaP is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding K Way Information and YuantaP shares Taiwan Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YuantaP shares Taiwan and K Way 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 K Way Information are associated (or correlated) with YuantaP Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YuantaP shares Taiwan has no effect on the direction of K Way i.e., K Way and YuantaP Shares go up and down completely randomly.
Pair Corralation between K Way and YuantaP Shares
Assuming the 90 days trading horizon K Way Information is expected to generate 1.08 times more return on investment than YuantaP Shares. However, K Way is 1.08 times more volatile than YuantaP shares Taiwan Mid Cap. It trades about -0.05 of its potential returns per unit of risk. YuantaP shares Taiwan Mid Cap is currently generating about -0.21 per unit of risk. If you would invest 2,755 in K Way Information on August 31, 2024 and sell it today you would lose (40.00) from holding K Way Information or give up 1.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
K Way Information vs. YuantaP shares Taiwan Mid Cap
Performance |
| Timeline |
| K Way Information |
| YuantaP shares Taiwan |
K Way and YuantaP Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K Way and YuantaP Shares
The main advantage of trading using opposite K Way and YuantaP Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K Way position performs unexpectedly, YuantaP Shares 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 YuantaP Shares will offset losses from the drop in YuantaP Shares' long position.| K Way vs. Emerging Display Technologies | K Way vs. Taiwan Speciality Chemicals | K Way vs. ADLINK Technology | K Way vs. PlayNitride |
| YuantaP Shares vs. Yuanta Daily Taiwan | YuantaP Shares vs. Cathay Taiwan 5G | YuantaP Shares vs. Yuanta Daily CSI | YuantaP Shares vs. Cathay Sustainability High |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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