Correlation Between Yulon Finance and Pou Chen
Can any of the company-specific risk be diversified away by investing in both Yulon Finance and Pou Chen 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 Pou Chen 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 Pou Chen Corp, you can compare the effects of market volatilities on Yulon Finance and Pou Chen 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 Pou Chen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulon Finance and Pou Chen.
Diversification Opportunities for Yulon Finance and Pou Chen
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yulon and Pou is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Finance Corp and Pou Chen Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pou Chen Corp 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 Pou Chen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pou Chen Corp has no effect on the direction of Yulon Finance i.e., Yulon Finance and Pou Chen go up and down completely randomly.
Pair Corralation between Yulon Finance and Pou Chen
Assuming the 90 days trading horizon Yulon Finance Corp is expected to under-perform the Pou Chen. In addition to that, Yulon Finance is 1.37 times more volatile than Pou Chen Corp. It trades about -0.29 of its total potential returns per unit of risk. Pou Chen Corp is currently generating about 0.38 per unit of volatility. If you would invest 3,755 in Pou Chen Corp on August 24, 2024 and sell it today you would earn a total of 615.00 from holding Pou Chen Corp or generate 16.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yulon Finance Corp vs. Pou Chen Corp
Performance |
| Timeline |
| Yulon Finance Corp |
| Pou Chen Corp |
Yulon Finance and Pou Chen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yulon Finance and Pou Chen
The main advantage of trading using opposite Yulon Finance and Pou Chen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon Finance position performs unexpectedly, Pou Chen 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 Pou Chen will offset losses from the drop in Pou Chen's long position.| Yulon Finance vs. Fubon Financial Holding | Yulon Finance vs. Cathay Financial Holding | Yulon Finance vs. ESUN Financial Holding |
| 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 |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |