Correlation Between Yuan High and Tai Tung
Can any of the company-specific risk be diversified away by investing in both Yuan High and Tai Tung 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 Yuan High and Tai Tung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yuan High Tech Development and Tai Tung Communication, you can compare the effects of market volatilities on Yuan High and Tai Tung 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 Yuan High with a short position of Tai Tung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuan High and Tai Tung.
Diversification Opportunities for Yuan High and Tai Tung
Excellent diversification
The 3 months correlation between Yuan and Tai is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Yuan High Tech Development and Tai Tung Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tai Tung Communication and Yuan High 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 Yuan High Tech Development are associated (or correlated) with Tai Tung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tai Tung Communication has no effect on the direction of Yuan High i.e., Yuan High and Tai Tung go up and down completely randomly.
Pair Corralation between Yuan High and Tai Tung
Assuming the 90 days trading horizon Yuan High Tech Development is expected to generate 3.23 times more return on investment than Tai Tung. However, Yuan High is 3.23 times more volatile than Tai Tung Communication. It trades about 0.11 of its potential returns per unit of risk. Tai Tung Communication is currently generating about 0.17 per unit of risk. If you would invest 19,200 in Yuan High Tech Development on November 28, 2024 and sell it today you would earn a total of 1,250 from holding Yuan High Tech Development or generate 6.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Yuan High Tech Development vs. Tai Tung Communication
Performance |
| Timeline |
| Yuan High Tech |
| Tai Tung Communication |
Yuan High and Tai Tung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuan High and Tai Tung
The main advantage of trading using opposite Yuan High and Tai Tung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuan High position performs unexpectedly, Tai Tung 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 Tai Tung will offset losses from the drop in Tai Tung's long position.| Yuan High vs. Simplo Technology Co | Yuan High vs. Asmedia Technology | Yuan High vs. AVer Information | Yuan High vs. Jetway Information Co |
| Tai Tung vs. Zinwell | Tai Tung vs. Mercuries Life Insurance | Tai Tung vs. Darwin Precisions Corp | Tai Tung vs. Jinli Group Holdings |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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