Correlation Between Yuanta Futures and First Insurance
Can any of the company-specific risk be diversified away by investing in both Yuanta Futures and First Insurance 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 Yuanta Futures and First Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yuanta Futures Co and First Insurance Co, you can compare the effects of market volatilities on Yuanta Futures and First Insurance 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 Yuanta Futures with a short position of First Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanta Futures and First Insurance.
Diversification Opportunities for Yuanta Futures and First Insurance
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yuanta and First is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta Futures Co and First Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Insurance and Yuanta Futures 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 Yuanta Futures Co are associated (or correlated) with First Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Insurance has no effect on the direction of Yuanta Futures i.e., Yuanta Futures and First Insurance go up and down completely randomly.
Pair Corralation between Yuanta Futures and First Insurance
Assuming the 90 days trading horizon Yuanta Futures is expected to generate 1.47 times less return on investment than First Insurance. In addition to that, Yuanta Futures is 1.04 times more volatile than First Insurance Co. It trades about 0.17 of its total potential returns per unit of risk. First Insurance Co is currently generating about 0.27 per unit of volatility. If you would invest 2,220 in First Insurance Co on September 12, 2024 and sell it today you would earn a total of 320.00 from holding First Insurance Co or generate 14.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuanta Futures Co vs. First Insurance Co
Performance |
| Timeline |
| Yuanta Futures |
| First Insurance |
Yuanta Futures and First Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuanta Futures and First Insurance
The main advantage of trading using opposite Yuanta Futures and First Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuanta Futures position performs unexpectedly, First Insurance 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 First Insurance will offset losses from the drop in First Insurance's long position.| Yuanta Futures vs. IBF Financial Holdings | Yuanta Futures vs. Capital Securities Corp | Yuanta Futures vs. President Securities Corp | Yuanta Futures vs. China Bills Finance |
| First Insurance vs. Central Reinsurance Corp | First Insurance vs. Huaku Development Co | First Insurance vs. Fubon Financial Holding | First Insurance vs. Chailease Holding 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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