Correlation Between Da Li and YeaShin International
Can any of the company-specific risk be diversified away by investing in both Da Li and YeaShin International 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 Da Li and YeaShin International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Da Li Development Co and YeaShin International Development, you can compare the effects of market volatilities on Da Li and YeaShin International 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 Da Li with a short position of YeaShin International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Da Li and YeaShin International.
Diversification Opportunities for Da Li and YeaShin International
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 6177 and YeaShin is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Da Li Development Co and YeaShin International Developm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YeaShin International and Da Li 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 Da Li Development Co are associated (or correlated) with YeaShin International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YeaShin International has no effect on the direction of Da Li i.e., Da Li and YeaShin International go up and down completely randomly.
Pair Corralation between Da Li and YeaShin International
Assuming the 90 days trading horizon Da Li is expected to generate 13.37 times less return on investment than YeaShin International. But when comparing it to its historical volatility, Da Li Development Co is 7.52 times less risky than YeaShin International. It trades about 0.05 of its potential returns per unit of risk. YeaShin International Development is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,870 in YeaShin International Development on August 30, 2024 and sell it today you would earn a total of 190.00 from holding YeaShin International Development or generate 6.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Da Li Development Co vs. YeaShin International Developm
Performance |
| Timeline |
| Da Li Development |
| YeaShin International |
Da Li and YeaShin International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Da Li and YeaShin International
The main advantage of trading using opposite Da Li and YeaShin International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Da Li position performs unexpectedly, YeaShin International 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 YeaShin International will offset losses from the drop in YeaShin International's long position.| Da Li vs. Tainan Spinning Co | Da Li vs. Carnival Industrial Corp | Da Li vs. Symtek Automation Asia | Da Li vs. CTCI Corp |
| YeaShin International vs. Sino Horizon Holdings | YeaShin International vs. Run Long Construction | YeaShin International vs. Chong Hong Construction | YeaShin International vs. Sinyi Realty |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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