Correlation Between Pou Chen and Yufo Electronics
Can any of the company-specific risk be diversified away by investing in both Pou Chen and Yufo Electronics 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 Pou Chen and Yufo Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pou Chen Corp and Yufo Electronics Co, you can compare the effects of market volatilities on Pou Chen and Yufo Electronics 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 Pou Chen with a short position of Yufo Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pou Chen and Yufo Electronics.
Diversification Opportunities for Pou Chen and Yufo Electronics
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pou and Yufo is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Pou Chen Corp and Yufo Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yufo Electronics and Pou Chen 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 Pou Chen Corp are associated (or correlated) with Yufo Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yufo Electronics has no effect on the direction of Pou Chen i.e., Pou Chen and Yufo Electronics go up and down completely randomly.
Pair Corralation between Pou Chen and Yufo Electronics
Assuming the 90 days trading horizon Pou Chen Corp is expected to generate 0.88 times more return on investment than Yufo Electronics. However, Pou Chen Corp is 1.14 times less risky than Yufo Electronics. It trades about 0.08 of its potential returns per unit of risk. Yufo Electronics Co is currently generating about 0.01 per unit of risk. If you would invest 3,120 in Pou Chen Corp on September 4, 2024 and sell it today you would earn a total of 1,180 from holding Pou Chen Corp or generate 37.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pou Chen Corp vs. Yufo Electronics Co
Performance |
| Timeline |
| Pou Chen Corp |
| Yufo Electronics |
Pou Chen and Yufo Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pou Chen and Yufo Electronics
The main advantage of trading using opposite Pou Chen and Yufo Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pou Chen position performs unexpectedly, Yufo Electronics 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 Yufo Electronics will offset losses from the drop in Yufo Electronics' long position.| Pou Chen vs. Uni President Enterprises Corp | Pou Chen vs. Cheng Shin Rubber | Pou Chen vs. Far Eastern New | Pou Chen vs. Formosa Chemicals Fibre |
| Yufo Electronics vs. Taiwan Semiconductor Manufacturing | Yufo Electronics vs. Yang Ming Marine | Yufo Electronics vs. AU Optronics | Yufo Electronics vs. Innolux Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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