Correlation Between Yieh United and Taiwan Steel
Can any of the company-specific risk be diversified away by investing in both Yieh United and Taiwan Steel 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 Taiwan Steel 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 Taiwan Steel Union, you can compare the effects of market volatilities on Yieh United and Taiwan Steel 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 Taiwan Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yieh United and Taiwan Steel.
Diversification Opportunities for Yieh United and Taiwan Steel
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Yieh and Taiwan is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Yieh United Steel and Taiwan Steel Union in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Steel Union 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 Taiwan Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Steel Union has no effect on the direction of Yieh United i.e., Yieh United and Taiwan Steel go up and down completely randomly.
Pair Corralation between Yieh United and Taiwan Steel
Assuming the 90 days trading horizon Yieh United Steel is expected to generate 0.76 times more return on investment than Taiwan Steel. However, Yieh United Steel is 1.31 times less risky than Taiwan Steel. It trades about -0.08 of its potential returns per unit of risk. Taiwan Steel Union is currently generating about -0.33 per unit of risk. If you would invest 650.00 in Yieh United Steel on August 26, 2024 and sell it today you would lose (11.00) from holding Yieh United Steel or give up 1.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yieh United Steel vs. Taiwan Steel Union
Performance |
| Timeline |
| Yieh United Steel |
| Taiwan Steel Union |
Yieh United and Taiwan Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yieh United and Taiwan Steel
The main advantage of trading using opposite Yieh United and Taiwan Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yieh United position performs unexpectedly, Taiwan Steel 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 Steel will offset losses from the drop in Taiwan Steel'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 |
| Taiwan Steel vs. Cleanaway Co | Taiwan Steel vs. Taiwan Secom Co | Taiwan Steel vs. TTET Union Corp | Taiwan Steel vs. Tehmag 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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