Correlation Between Taiwan Steel and Yieh United
Can any of the company-specific risk be diversified away by investing in both Taiwan Steel and Yieh United 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 Taiwan Steel and Yieh United into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Steel Union and Yieh United Steel, you can compare the effects of market volatilities on Taiwan Steel and Yieh United 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 Taiwan Steel with a short position of Yieh United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Steel and Yieh United.
Diversification Opportunities for Taiwan Steel and Yieh United
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Taiwan and Yieh is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Steel Union and Yieh United Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yieh United Steel and Taiwan Steel 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 Taiwan Steel Union are associated (or correlated) with Yieh United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yieh United Steel has no effect on the direction of Taiwan Steel i.e., Taiwan Steel and Yieh United go up and down completely randomly.
Pair Corralation between Taiwan Steel and Yieh United
Assuming the 90 days trading horizon Taiwan Steel Union is expected to under-perform the Yieh United. In addition to that, Taiwan Steel is 1.33 times more volatile than Yieh United Steel. It trades about -0.22 of its total potential returns per unit of risk. Yieh United Steel is currently generating about 0.0 per unit of volatility. If you would invest 639.00 in Yieh United Steel on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Yieh United Steel or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan Steel Union vs. Yieh United Steel
Performance |
| Timeline |
| Taiwan Steel Union |
| Yieh United Steel |
Taiwan Steel and Yieh United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Steel and Yieh United
The main advantage of trading using opposite Taiwan Steel and Yieh United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Steel position performs unexpectedly, Yieh United 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 Yieh United will offset losses from the drop in Yieh United's long position.| Taiwan Steel vs. Cleanaway Co | Taiwan Steel vs. Taiwan Secom Co | Taiwan Steel vs. TTET Union Corp | Taiwan Steel vs. Tehmag Foods |
| Yieh United vs. Cayenne Entertainment Technology | Yieh United vs. Chunghwa Telecom Co | Yieh United vs. Jia Jie Biomedical | Yieh United vs. Simple Mart Retail |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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