Correlation Between Yulon Finance and Yang Ming
Can any of the company-specific risk be diversified away by investing in both Yulon Finance 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 Yulon Finance and Yang Ming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yulon Finance Corp and Yang Ming Marine, you can compare the effects of market volatilities on Yulon Finance 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 Yulon Finance with a short position of Yang Ming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulon Finance and Yang Ming.
Diversification Opportunities for Yulon Finance and Yang Ming
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yulon and Yang is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Finance Corp 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 Yulon Finance 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 Yulon Finance Corp 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 Yulon Finance i.e., Yulon Finance and Yang Ming go up and down completely randomly.
Pair Corralation between Yulon Finance and Yang Ming
Assuming the 90 days trading horizon Yulon Finance Corp is expected to under-perform the Yang Ming. But the stock apears to be less risky and, when comparing its historical volatility, Yulon Finance Corp is 1.21 times less risky than Yang Ming. The stock trades about -0.29 of its potential returns per unit of risk. The Yang Ming Marine is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 6,900 in Yang Ming Marine on August 29, 2024 and sell it today you would earn a total of 720.00 from holding Yang Ming Marine or generate 10.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yulon Finance Corp vs. Yang Ming Marine
Performance |
| Timeline |
| Yulon Finance Corp |
| Yang Ming Marine |
Yulon Finance and Yang Ming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yulon Finance and Yang Ming
The main advantage of trading using opposite Yulon Finance and Yang Ming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon Finance 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.| Yulon Finance vs. Taiwan Secom Co | Yulon Finance vs. TTET Union Corp | Yulon Finance vs. China Steel Chemical | Yulon Finance vs. Taiwan Shin Kong |
| Yang Ming vs. Yulon Motor Co | Yang Ming vs. Far Eastern Department | Yang Ming vs. China Steel Corp | Yang Ming vs. Chang Hwa Commercial |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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