Correlation Between Landis Taipei and Yeou Yih
Can any of the company-specific risk be diversified away by investing in both Landis Taipei 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 Landis Taipei and Yeou Yih into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Landis Taipei Hotel and Yeou Yih Steel, you can compare the effects of market volatilities on Landis Taipei 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 Landis Taipei with a short position of Yeou Yih. Check out your portfolio center. Please also check ongoing floating volatility patterns of Landis Taipei and Yeou Yih.
Diversification Opportunities for Landis Taipei and Yeou Yih
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Landis and Yeou is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Landis Taipei Hotel 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 Landis Taipei 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 Landis Taipei Hotel 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 Landis Taipei i.e., Landis Taipei and Yeou Yih go up and down completely randomly.
Pair Corralation between Landis Taipei and Yeou Yih
Assuming the 90 days trading horizon Landis Taipei is expected to generate 1.69 times less return on investment than Yeou Yih. In addition to that, Landis Taipei is 2.19 times more volatile than Yeou Yih Steel. It trades about 0.01 of its total potential returns per unit of risk. Yeou Yih Steel is currently generating about 0.02 per unit of volatility. If you would invest 1,392 in Yeou Yih Steel on August 29, 2024 and sell it today you would earn a total of 163.00 from holding Yeou Yih Steel or generate 11.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Landis Taipei Hotel vs. Yeou Yih Steel
Performance |
| Timeline |
| Landis Taipei Hotel |
| Yeou Yih Steel |
Landis Taipei and Yeou Yih Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Landis Taipei and Yeou Yih
The main advantage of trading using opposite Landis Taipei and Yeou Yih positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Landis Taipei 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.| Landis Taipei vs. Formosa International Hotels | Landis Taipei vs. Ambassador Hotel | Landis Taipei vs. FDC International Hotels | Landis Taipei vs. First Hotel Co |
| Yeou Yih vs. China Man Made Fiber | Yeou Yih vs. USI Corp | Yeou Yih vs. China Petrochemical Development | Yeou Yih vs. Yulon Motor Co |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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