Correlation Between Wonderful and Yeou Yih
Can any of the company-specific risk be diversified away by investing in both Wonderful 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 Wonderful and Yeou Yih into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wonderful Hi Tech Co and Yeou Yih Steel, you can compare the effects of market volatilities on Wonderful 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 Wonderful with a short position of Yeou Yih. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonderful and Yeou Yih.
Diversification Opportunities for Wonderful and Yeou Yih
Good diversification
The 3 months correlation between Wonderful and Yeou is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Wonderful Hi Tech Co 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 Wonderful 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 Wonderful Hi Tech Co 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 Wonderful i.e., Wonderful and Yeou Yih go up and down completely randomly.
Pair Corralation between Wonderful and Yeou Yih
Assuming the 90 days trading horizon Wonderful Hi Tech Co is expected to generate 4.52 times more return on investment than Yeou Yih. However, Wonderful is 4.52 times more volatile than Yeou Yih Steel. It trades about -0.02 of its potential returns per unit of risk. Yeou Yih Steel is currently generating about -0.08 per unit of risk. If you would invest 3,515 in Wonderful Hi Tech Co on September 1, 2024 and sell it today you would lose (75.00) from holding Wonderful Hi Tech Co or give up 2.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wonderful Hi Tech Co vs. Yeou Yih Steel
Performance |
| Timeline |
| Wonderful Hi Tech |
| Yeou Yih Steel |
Wonderful and Yeou Yih Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonderful and Yeou Yih
The main advantage of trading using opposite Wonderful and Yeou Yih positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonderful 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.| Wonderful vs. Accton Technology Corp | Wonderful vs. HTC Corp | Wonderful vs. Wistron NeWeb Corp | Wonderful vs. Arcadyan Technology Corp |
| Yeou Yih vs. Asia Metal Industries | Yeou Yih vs. Taiwan Chinsan Electronic | Yeou Yih vs. Sesoda Corp | Yeou Yih vs. China Metal Products |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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