Correlation Between Yeou Yih and Taita Chemical
Can any of the company-specific risk be diversified away by investing in both Yeou Yih and Taita Chemical 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 Yeou Yih and Taita Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yeou Yih Steel and Taita Chemical Co, you can compare the effects of market volatilities on Yeou Yih and Taita Chemical 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 Yeou Yih with a short position of Taita Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yeou Yih and Taita Chemical.
Diversification Opportunities for Yeou Yih and Taita Chemical
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yeou and Taita is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Yeou Yih Steel and Taita Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taita Chemical and Yeou Yih 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 Yeou Yih Steel are associated (or correlated) with Taita Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taita Chemical has no effect on the direction of Yeou Yih i.e., Yeou Yih and Taita Chemical go up and down completely randomly.
Pair Corralation between Yeou Yih and Taita Chemical
Assuming the 90 days trading horizon Yeou Yih Steel is expected to generate 0.34 times more return on investment than Taita Chemical. However, Yeou Yih Steel is 2.94 times less risky than Taita Chemical. It trades about -0.08 of its potential returns per unit of risk. Taita Chemical Co is currently generating about -0.26 per unit of risk. If you would invest 1,560 in Yeou Yih Steel on August 30, 2024 and sell it today you would lose (20.00) from holding Yeou Yih Steel or give up 1.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yeou Yih Steel vs. Taita Chemical Co
Performance |
| Timeline |
| Yeou Yih Steel |
| Taita Chemical |
Yeou Yih and Taita Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yeou Yih and Taita Chemical
The main advantage of trading using opposite Yeou Yih and Taita Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yeou Yih position performs unexpectedly, Taita Chemical 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 Taita Chemical will offset losses from the drop in Taita Chemical's long position.| Yeou Yih vs. Landis Taipei Hotel | Yeou Yih vs. Energenesis Biomedical Co | Yeou Yih vs. Great China Metal | Yeou Yih vs. Arbor Technology |
| Taita Chemical vs. China General Plastics | Taita Chemical vs. Asia Polymer Corp | Taita Chemical vs. USI Corp | Taita Chemical vs. Grand Pacific Petrochemical |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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