Correlation Between Hsin Ba and Yang Ming
Can any of the company-specific risk be diversified away by investing in both Hsin Ba and Yang Ming 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 Hsin Ba and Yang Ming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hsin Ba Ba and Yang Ming Marine, you can compare the effects of market volatilities on Hsin Ba and Yang Ming 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 Hsin Ba with a short position of Yang Ming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hsin Ba and Yang Ming.
Diversification Opportunities for Hsin Ba and Yang Ming
Excellent diversification
The 3 months correlation between Hsin and Yang is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Hsin Ba Ba and Yang Ming Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yang Ming Marine and Hsin Ba 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 Hsin Ba Ba are associated (or correlated) with Yang Ming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yang Ming Marine has no effect on the direction of Hsin Ba i.e., Hsin Ba and Yang Ming go up and down completely randomly.
Pair Corralation between Hsin Ba and Yang Ming
Assuming the 90 days trading horizon Hsin Ba Ba is expected to generate 1.06 times more return on investment than Yang Ming. However, Hsin Ba is 1.06 times more volatile than Yang Ming Marine. It trades about 0.12 of its potential returns per unit of risk. Yang Ming Marine is currently generating about 0.09 per unit of risk. If you would invest 5,440 in Hsin Ba Ba on September 12, 2024 and sell it today you would earn a total of 6,910 from holding Hsin Ba Ba or generate 127.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hsin Ba Ba vs. Yang Ming Marine
Performance |
| Timeline |
| Hsin Ba Ba |
| Yang Ming Marine |
Hsin Ba and Yang Ming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hsin Ba and Yang Ming
The main advantage of trading using opposite Hsin Ba and Yang Ming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hsin Ba position performs unexpectedly, Yang Ming 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 Yang Ming will offset losses from the drop in Yang Ming's long position.| Hsin Ba vs. Yang Ming Marine | Hsin Ba vs. Wan Hai Lines | Hsin Ba vs. U Ming Marine Transport | Hsin Ba vs. Taiwan Navigation Co |
| Yang Ming vs. Evergreen Marine Corp | Yang Ming vs. Wan Hai Lines | Yang Ming vs. China Airlines | Yang Ming vs. Eva Airways 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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