Correlation Between Yieh United and Sheng Yu
Can any of the company-specific risk be diversified away by investing in both Yieh United and Sheng Yu 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 Yieh United and Sheng Yu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yieh United Steel and Sheng Yu Steel, you can compare the effects of market volatilities on Yieh United and Sheng Yu 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 Yieh United with a short position of Sheng Yu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yieh United and Sheng Yu.
Diversification Opportunities for Yieh United and Sheng Yu
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Yieh and Sheng is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Yieh United Steel and Sheng Yu Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sheng Yu Steel and Yieh United 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 Yieh United Steel are associated (or correlated) with Sheng Yu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sheng Yu Steel has no effect on the direction of Yieh United i.e., Yieh United and Sheng Yu go up and down completely randomly.
Pair Corralation between Yieh United and Sheng Yu
Assuming the 90 days trading horizon Yieh United Steel is expected to generate 1.17 times more return on investment than Sheng Yu. However, Yieh United is 1.17 times more volatile than Sheng Yu Steel. It trades about 0.0 of its potential returns per unit of risk. Sheng Yu Steel is currently generating about -0.2 per unit of risk. If you would invest 639.00 in Yieh United Steel on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Yieh United Steel or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yieh United Steel vs. Sheng Yu Steel
Performance |
| Timeline |
| Yieh United Steel |
| Sheng Yu Steel |
Yieh United and Sheng Yu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yieh United and Sheng Yu
The main advantage of trading using opposite Yieh United and Sheng Yu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yieh United position performs unexpectedly, Sheng Yu 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 Sheng Yu will offset losses from the drop in Sheng Yu's long position.| Yieh United vs. Cayenne Entertainment Technology | Yieh United vs. Chunghwa Telecom Co | Yieh United vs. Jia Jie Biomedical | Yieh United vs. Simple Mart Retail |
| Sheng Yu vs. Cheng Shin Rubber | Sheng Yu vs. Taiwan Cement Corp | Sheng Yu vs. China Steel Chemical | Sheng Yu vs. Yulon Motor Co |
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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