Correlation Between Yeou Yih and Yieh Phui
Can any of the company-specific risk be diversified away by investing in both Yeou Yih and Yieh Phui 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 Yieh Phui 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 Yieh Phui Enterprise, you can compare the effects of market volatilities on Yeou Yih and Yieh Phui 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 Yieh Phui. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yeou Yih and Yieh Phui.
Diversification Opportunities for Yeou Yih and Yieh Phui
Very poor diversification
The 3 months correlation between Yeou and Yieh is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Yeou Yih Steel and Yieh Phui Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yieh Phui Enterprise 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 Yieh Phui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yieh Phui Enterprise has no effect on the direction of Yeou Yih i.e., Yeou Yih and Yieh Phui go up and down completely randomly.
Pair Corralation between Yeou Yih and Yieh Phui
Assuming the 90 days trading horizon Yeou Yih Steel is expected to under-perform the Yieh Phui. But the stock apears to be less risky and, when comparing its historical volatility, Yeou Yih Steel is 1.07 times less risky than Yieh Phui. The stock trades about -0.08 of its potential returns per unit of risk. The Yieh Phui Enterprise is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,510 in Yieh Phui Enterprise on August 30, 2024 and sell it today you would earn a total of 25.00 from holding Yieh Phui Enterprise or generate 1.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yeou Yih Steel vs. Yieh Phui Enterprise
Performance |
| Timeline |
| Yeou Yih Steel |
| Yieh Phui Enterprise |
Yeou Yih and Yieh Phui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yeou Yih and Yieh Phui
The main advantage of trading using opposite Yeou Yih and Yieh Phui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yeou Yih position performs unexpectedly, Yieh Phui 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 Yieh Phui will offset losses from the drop in Yieh Phui'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 |
| Yieh Phui vs. Chung Hung Steel | Yieh Phui vs. Tung Ho Steel | Yieh Phui vs. Sheng Yu Steel | Yieh Phui vs. China Steel Corp |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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