Correlation Between Ford and YuantaP Shares
Can any of the company-specific risk be diversified away by investing in both Ford and YuantaP Shares 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 Ford and YuantaP Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and YuantaP shares Taiwan Top, you can compare the effects of market volatilities on Ford and YuantaP Shares 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 Ford with a short position of YuantaP Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and YuantaP Shares.
Diversification Opportunities for Ford and YuantaP Shares
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ford and YuantaP is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and YuantaP shares Taiwan Top in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YuantaP shares Taiwan and Ford 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 Ford Motor are associated (or correlated) with YuantaP Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YuantaP shares Taiwan has no effect on the direction of Ford i.e., Ford and YuantaP Shares go up and down completely randomly.
Pair Corralation between Ford and YuantaP Shares
Taking into account the 90-day investment horizon Ford is expected to generate 7.24 times less return on investment than YuantaP Shares. In addition to that, Ford is 1.63 times more volatile than YuantaP shares Taiwan Top. It trades about 0.01 of its total potential returns per unit of risk. YuantaP shares Taiwan Top is currently generating about 0.1 per unit of volatility. If you would invest 12,107 in YuantaP shares Taiwan Top on August 27, 2024 and sell it today you would earn a total of 7,198 from holding YuantaP shares Taiwan Top or generate 59.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.51% |
| Values | Daily Returns |
Ford Motor vs. YuantaP shares Taiwan Top
Performance |
| Timeline |
| Ford Motor |
| YuantaP shares Taiwan |
Ford and YuantaP Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and YuantaP Shares
The main advantage of trading using opposite Ford and YuantaP Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, YuantaP Shares 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 YuantaP Shares will offset losses from the drop in YuantaP Shares' long position.The idea behind Ford Motor and YuantaP shares Taiwan Top pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| YuantaP Shares vs. YuantaP shares MSCI Taiwan | YuantaP Shares vs. YuantaP shares Taiwan GreTai | YuantaP Shares vs. YuantaP shares SSE50 | YuantaP Shares vs. YuantaP shares Taiwan Mid Cap |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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