Correlation Between Leatec Fine and Yuanta Daily
Can any of the company-specific risk be diversified away by investing in both Leatec Fine and Yuanta Daily 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 Yuanta Daily 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 Yuanta Daily Taiwan, you can compare the effects of market volatilities on Leatec Fine and Yuanta Daily 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 Yuanta Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leatec Fine and Yuanta Daily.
Diversification Opportunities for Leatec Fine and Yuanta Daily
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Leatec and Yuanta is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Leatec Fine Ceramics and Yuanta Daily Taiwan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuanta Daily Taiwan 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 Yuanta Daily. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuanta Daily Taiwan has no effect on the direction of Leatec Fine i.e., Leatec Fine and Yuanta Daily go up and down completely randomly.
Pair Corralation between Leatec Fine and Yuanta Daily
Assuming the 90 days trading horizon Leatec Fine is expected to generate 1.42 times less return on investment than Yuanta Daily. In addition to that, Leatec Fine is 1.17 times more volatile than Yuanta Daily Taiwan. It trades about 0.05 of its total potential returns per unit of risk. Yuanta Daily Taiwan is currently generating about 0.09 per unit of volatility. If you would invest 9,765 in Yuanta Daily Taiwan on September 3, 2024 and sell it today you would earn a total of 12,960 from holding Yuanta Daily Taiwan or generate 132.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.38% |
| Values | Daily Returns |
Leatec Fine Ceramics vs. Yuanta Daily Taiwan
Performance |
| Timeline |
| Leatec Fine Ceramics |
| Yuanta Daily Taiwan |
Leatec Fine and Yuanta Daily Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leatec Fine and Yuanta Daily
The main advantage of trading using opposite Leatec Fine and Yuanta Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leatec Fine position performs unexpectedly, Yuanta Daily 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 Yuanta Daily will offset losses from the drop in Yuanta Daily's long position.| Leatec Fine vs. Formosa Chemicals Fibre | Leatec Fine vs. Univacco Technology | Leatec Fine vs. Intai Technology | Leatec Fine vs. Microtips Technology |
| Yuanta Daily vs. Yuanta Daily SP | Yuanta Daily vs. Yuanta Securities Investment | Yuanta Daily vs. Yuanta SP GSCI | Yuanta Daily vs. Yuanta Global NexGen |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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