Correlation Between Yeou Yih and Shanghai Commercial
Can any of the company-specific risk be diversified away by investing in both Yeou Yih and Shanghai Commercial 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 Shanghai Commercial 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 Shanghai Commercial Savings, you can compare the effects of market volatilities on Yeou Yih and Shanghai Commercial 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 Shanghai Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yeou Yih and Shanghai Commercial.
Diversification Opportunities for Yeou Yih and Shanghai Commercial
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yeou and Shanghai is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Yeou Yih Steel and Shanghai Commercial Savings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Commercial 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 Shanghai Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Commercial has no effect on the direction of Yeou Yih i.e., Yeou Yih and Shanghai Commercial go up and down completely randomly.
Pair Corralation between Yeou Yih and Shanghai Commercial
Assuming the 90 days trading horizon Yeou Yih Steel is expected to under-perform the Shanghai Commercial. But the stock apears to be less risky and, when comparing its historical volatility, Yeou Yih Steel is 1.29 times less risky than Shanghai Commercial. The stock trades about -0.39 of its potential returns per unit of risk. The Shanghai Commercial Savings is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4,015 in Shanghai Commercial Savings on October 21, 2024 and sell it today you would earn a total of 145.00 from holding Shanghai Commercial Savings or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yeou Yih Steel vs. Shanghai Commercial Savings
Performance |
| Timeline |
| Yeou Yih Steel |
| Shanghai Commercial |
Yeou Yih and Shanghai Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yeou Yih and Shanghai Commercial
The main advantage of trading using opposite Yeou Yih and Shanghai Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yeou Yih position performs unexpectedly, Shanghai Commercial 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 Shanghai Commercial will offset losses from the drop in Shanghai Commercial's long position.| Yeou Yih vs. Fu Burg Industrial | Yeou Yih vs. Tsang Yow Industrial | Yeou Yih vs. Onyx Healthcare | Yeou Yih vs. MedFirst Healthcare Services |
| Shanghai Commercial vs. Mega Financial Holding | Shanghai Commercial vs. Yuanta Financial Holdings | Shanghai Commercial vs. ESUN Financial Holding | Shanghai Commercial vs. Taiwan Cooperative Financial |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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