Correlation Between Yulon Finance and Taiwan Navigation
Can any of the company-specific risk be diversified away by investing in both Yulon Finance and Taiwan Navigation 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 Taiwan Navigation 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 Taiwan Navigation Co, you can compare the effects of market volatilities on Yulon Finance and Taiwan Navigation 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 Taiwan Navigation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulon Finance and Taiwan Navigation.
Diversification Opportunities for Yulon Finance and Taiwan Navigation
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Yulon and Taiwan is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Finance Corp and Taiwan Navigation Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Navigation 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 Taiwan Navigation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Navigation has no effect on the direction of Yulon Finance i.e., Yulon Finance and Taiwan Navigation go up and down completely randomly.
Pair Corralation between Yulon Finance and Taiwan Navigation
Assuming the 90 days trading horizon Yulon Finance Corp is expected to under-perform the Taiwan Navigation. In addition to that, Yulon Finance is 1.16 times more volatile than Taiwan Navigation Co. It trades about -0.09 of its total potential returns per unit of risk. Taiwan Navigation Co is currently generating about -0.09 per unit of volatility. If you would invest 3,795 in Taiwan Navigation Co on August 31, 2024 and sell it today you would lose (690.00) from holding Taiwan Navigation Co or give up 18.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yulon Finance Corp vs. Taiwan Navigation Co
Performance |
| Timeline |
| Yulon Finance Corp |
| Taiwan Navigation |
Yulon Finance and Taiwan Navigation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yulon Finance and Taiwan Navigation
The main advantage of trading using opposite Yulon Finance and Taiwan Navigation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon Finance position performs unexpectedly, Taiwan Navigation 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 Taiwan Navigation will offset losses from the drop in Taiwan Navigation's long position.| Yulon Finance vs. Chailease Holding Co | Yulon Finance vs. Taiwan Secom Co | Yulon Finance vs. TTET Union Corp | Yulon Finance vs. China Steel Chemical |
| Taiwan Navigation vs. BES Engineering Co | Taiwan Navigation vs. Continental Holdings Corp | Taiwan Navigation vs. Kee Tai Properties | Taiwan Navigation vs. Hung Sheng Construction |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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