Correlation Between Yieh United and ZongTai Real
Can any of the company-specific risk be diversified away by investing in both Yieh United and ZongTai Real 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 ZongTai Real 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 ZongTai Real Estate, you can compare the effects of market volatilities on Yieh United and ZongTai Real 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 ZongTai Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yieh United and ZongTai Real.
Diversification Opportunities for Yieh United and ZongTai Real
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yieh and ZongTai is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Yieh United Steel and ZongTai Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZongTai Real Estate 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 ZongTai Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZongTai Real Estate has no effect on the direction of Yieh United i.e., Yieh United and ZongTai Real go up and down completely randomly.
Pair Corralation between Yieh United and ZongTai Real
Assuming the 90 days trading horizon Yieh United Steel is expected to under-perform the ZongTai Real. But the stock apears to be less risky and, when comparing its historical volatility, Yieh United Steel is 1.67 times less risky than ZongTai Real. The stock trades about -0.03 of its potential returns per unit of risk. The ZongTai Real Estate is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 3,120 in ZongTai Real Estate on September 1, 2024 and sell it today you would earn a total of 315.00 from holding ZongTai Real Estate or generate 10.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Yieh United Steel vs. ZongTai Real Estate
Performance |
| Timeline |
| Yieh United Steel |
| ZongTai Real Estate |
Yieh United and ZongTai Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yieh United and ZongTai Real
The main advantage of trading using opposite Yieh United and ZongTai Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yieh United position performs unexpectedly, ZongTai Real 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 ZongTai Real will offset losses from the drop in ZongTai Real'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 |
| ZongTai Real vs. Yieh United Steel | ZongTai Real vs. Sheng Yu Steel | ZongTai Real vs. Taiwan Steel Union | ZongTai Real vs. Wei Chuan Foods |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |