Correlation Between Yieh United and Hsin Kuang
Can any of the company-specific risk be diversified away by investing in both Yieh United and Hsin Kuang 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 Hsin Kuang 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 Hsin Kuang Steel, you can compare the effects of market volatilities on Yieh United and Hsin Kuang 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 Hsin Kuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yieh United and Hsin Kuang.
Diversification Opportunities for Yieh United and Hsin Kuang
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Yieh and Hsin is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Yieh United Steel and Hsin Kuang Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hsin Kuang 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 Hsin Kuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hsin Kuang Steel has no effect on the direction of Yieh United i.e., Yieh United and Hsin Kuang go up and down completely randomly.
Pair Corralation between Yieh United and Hsin Kuang
Assuming the 90 days trading horizon Yieh United Steel is expected to generate 0.71 times more return on investment than Hsin Kuang. However, Yieh United Steel is 1.41 times less risky than Hsin Kuang. It trades about -0.03 of its potential returns per unit of risk. Hsin Kuang Steel is currently generating about -0.35 per unit of risk. If you would invest 644.00 in Yieh United Steel on September 1, 2024 and sell it today you would lose (5.00) from holding Yieh United Steel or give up 0.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yieh United Steel vs. Hsin Kuang Steel
Performance |
| Timeline |
| Yieh United Steel |
| Hsin Kuang Steel |
Yieh United and Hsin Kuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yieh United and Hsin Kuang
The main advantage of trading using opposite Yieh United and Hsin Kuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yieh United position performs unexpectedly, Hsin Kuang 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 Hsin Kuang will offset losses from the drop in Hsin Kuang's long position.| Yieh United vs. Basso Industry Corp | Yieh United vs. Chung Hsin Electric Machinery | Yieh United vs. TYC Brother Industrial | Yieh United vs. TECO Electric Machinery |
| Hsin Kuang vs. Chung Hung Steel | Hsin Kuang vs. Tung Ho Steel | Hsin Kuang vs. Ta Chen Stainless | Hsin Kuang vs. Feng Hsin Steel |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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