Correlation Between Yeou Yih and Evergreen Steel
Can any of the company-specific risk be diversified away by investing in both Yeou Yih and Evergreen 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 Yeou Yih and Evergreen Steel 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 Evergreen Steel Corp, you can compare the effects of market volatilities on Yeou Yih and Evergreen 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 Yeou Yih with a short position of Evergreen Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yeou Yih and Evergreen Steel.
Diversification Opportunities for Yeou Yih and Evergreen Steel
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Yeou and Evergreen is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Yeou Yih Steel and Evergreen Steel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evergreen Steel Corp 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 Evergreen Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evergreen Steel Corp has no effect on the direction of Yeou Yih i.e., Yeou Yih and Evergreen Steel go up and down completely randomly.
Pair Corralation between Yeou Yih and Evergreen Steel
Assuming the 90 days trading horizon Yeou Yih Steel is expected to generate 0.73 times more return on investment than Evergreen Steel. However, Yeou Yih Steel is 1.36 times less risky than Evergreen Steel. It trades about 0.01 of its potential returns per unit of risk. Evergreen Steel Corp is currently generating about -0.21 per unit of risk. If you would invest 1,545 in Yeou Yih Steel on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Yeou Yih Steel or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yeou Yih Steel vs. Evergreen Steel Corp
Performance |
| Timeline |
| Yeou Yih Steel |
| Evergreen Steel Corp |
Yeou Yih and Evergreen Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yeou Yih and Evergreen Steel
The main advantage of trading using opposite Yeou Yih and Evergreen Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yeou Yih position performs unexpectedly, Evergreen 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 Evergreen Steel will offset losses from the drop in Evergreen Steel's long position.| Yeou Yih vs. Lung Hwa Electronics | Yeou Yih vs. WT Microelectronics Co | Yeou Yih vs. Universal Microelectronics Co | Yeou Yih vs. Professional Computer Technology |
| Evergreen Steel vs. Yang Ming Marine | Evergreen Steel vs. Wan Hai Lines | Evergreen Steel vs. Hsin Kuang Steel | Evergreen Steel vs. Evergreen Marine 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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