Correlation Between Yungshin Construction and Tainan Spinning
Can any of the company-specific risk be diversified away by investing in both Yungshin Construction and Tainan Spinning 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 Yungshin Construction and Tainan Spinning into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yungshin Construction Development and Tainan Spinning Co, you can compare the effects of market volatilities on Yungshin Construction and Tainan Spinning 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 Yungshin Construction with a short position of Tainan Spinning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yungshin Construction and Tainan Spinning.
Diversification Opportunities for Yungshin Construction and Tainan Spinning
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Yungshin and Tainan is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Yungshin Construction Developm and Tainan Spinning Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tainan Spinning and Yungshin Construction 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 Yungshin Construction Development are associated (or correlated) with Tainan Spinning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tainan Spinning has no effect on the direction of Yungshin Construction i.e., Yungshin Construction and Tainan Spinning go up and down completely randomly.
Pair Corralation between Yungshin Construction and Tainan Spinning
Assuming the 90 days trading horizon Yungshin Construction Development is expected to under-perform the Tainan Spinning. In addition to that, Yungshin Construction is 3.96 times more volatile than Tainan Spinning Co. It trades about -0.3 of its total potential returns per unit of risk. Tainan Spinning Co is currently generating about -0.01 per unit of volatility. If you would invest 1,520 in Tainan Spinning Co on August 30, 2024 and sell it today you would lose (5.00) from holding Tainan Spinning Co or give up 0.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yungshin Construction Developm vs. Tainan Spinning Co
Performance |
| Timeline |
| Yungshin Construction |
| Tainan Spinning |
Yungshin Construction and Tainan Spinning Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yungshin Construction and Tainan Spinning
The main advantage of trading using opposite Yungshin Construction and Tainan Spinning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yungshin Construction position performs unexpectedly, Tainan Spinning 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 Tainan Spinning will offset losses from the drop in Tainan Spinning's long position.| Yungshin Construction vs. Tainan Spinning Co | Yungshin Construction vs. Carnival Industrial Corp | Yungshin Construction vs. Symtek Automation Asia | Yungshin Construction vs. CTCI Corp |
| Tainan Spinning vs. Yulon Finance Corp | Tainan Spinning vs. Taiwan Secom Co | Tainan Spinning vs. Great Wall Enterprise |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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