Correlation Between Acer E and Yieh United
Can any of the company-specific risk be diversified away by investing in both Acer E 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 Acer E and Yieh United into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acer E Enabling Service and Yieh United Steel, you can compare the effects of market volatilities on Acer E 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 Acer E with a short position of Yieh United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acer E and Yieh United.
Diversification Opportunities for Acer E and Yieh United
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Acer and Yieh is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Acer E Enabling Service 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 Acer E 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 Acer E Enabling Service 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 Acer E i.e., Acer E and Yieh United go up and down completely randomly.
Pair Corralation between Acer E and Yieh United
Assuming the 90 days trading horizon Acer E Enabling Service is expected to generate 3.08 times more return on investment than Yieh United. However, Acer E is 3.08 times more volatile than Yieh United Steel. It trades about 0.29 of its potential returns per unit of risk. Yieh United Steel is currently generating about 0.0 per unit of risk. If you would invest 24,400 in Acer E Enabling Service on September 14, 2024 and sell it today you would earn a total of 5,200 from holding Acer E Enabling Service or generate 21.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acer E Enabling Service vs. Yieh United Steel
Performance |
| Timeline |
| Acer E Enabling |
| Yieh United Steel |
Acer E and Yieh United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acer E and Yieh United
The main advantage of trading using opposite Acer E and Yieh United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acer E 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.| Acer E vs. Kao Fong Machinery | Acer E vs. Sitronix Technology Corp | Acer E vs. First Copper Technology | Acer E vs. Dawushan Farm Tech |
| Yieh United vs. Tainan Spinning Co | Yieh United vs. Lealea Enterprise Co | Yieh United vs. China Petrochemical Development | Yieh United vs. Ruentex Development Co |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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