Correlation Between Leatec Fine and YuantaP Shares
Can any of the company-specific risk be diversified away by investing in both Leatec Fine 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 Leatec Fine and YuantaP Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leatec Fine Ceramics and YuantaP shares MSCI Taiwan, you can compare the effects of market volatilities on Leatec Fine 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 Leatec Fine with a short position of YuantaP Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leatec Fine and YuantaP Shares.
Diversification Opportunities for Leatec Fine and YuantaP Shares
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Leatec and YuantaP is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Leatec Fine Ceramics and YuantaP shares MSCI Taiwan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YuantaP shares MSCI and Leatec Fine 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 Leatec Fine Ceramics 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 MSCI has no effect on the direction of Leatec Fine i.e., Leatec Fine and YuantaP Shares go up and down completely randomly.
Pair Corralation between Leatec Fine and YuantaP Shares
Assuming the 90 days trading horizon Leatec Fine Ceramics is expected to generate 1.92 times more return on investment than YuantaP Shares. However, Leatec Fine is 1.92 times more volatile than YuantaP shares MSCI Taiwan. It trades about -0.06 of its potential returns per unit of risk. YuantaP shares MSCI Taiwan is currently generating about -0.17 per unit of risk. If you would invest 2,975 in Leatec Fine Ceramics on August 29, 2024 and sell it today you would lose (95.00) from holding Leatec Fine Ceramics or give up 3.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leatec Fine Ceramics vs. YuantaP shares MSCI Taiwan
Performance |
| Timeline |
| Leatec Fine Ceramics |
| YuantaP shares MSCI |
Leatec Fine and YuantaP Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leatec Fine and YuantaP Shares
The main advantage of trading using opposite Leatec Fine and YuantaP Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leatec Fine 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.| Leatec Fine vs. Global Unichip Corp | Leatec Fine vs. Asmedia Technology | Leatec Fine vs. Unimicron Technology Corp | Leatec Fine vs. Novatek Microelectronics Corp |
| YuantaP Shares vs. Yuanta Daily Taiwan | YuantaP Shares vs. Fubon SSE180 Leveraged | YuantaP Shares vs. Leatec Fine Ceramics | YuantaP Shares vs. Information Technology Total |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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