Correlation Between YuantaP Shares and I Hwa

Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and I Hwa 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 YuantaP Shares and I Hwa into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between YuantaP shares Taiwan Top and I Hwa Industrial Co, you can compare the effects of market volatilities on YuantaP Shares and I Hwa 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 YuantaP Shares with a short position of I Hwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and I Hwa.

Diversification Opportunities for YuantaP Shares and I Hwa

-0.49

Correlation Coefficient

YuantaP Shares  I Hwa

Very good diversification

The 3 months correlation between YuantaP and 1456 is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Top and I Hwa Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I Hwa Industrial and YuantaP Shares 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 YuantaP shares Taiwan Top are associated (or correlated) with I Hwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I Hwa Industrial has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and I Hwa go up and down completely randomly.

Pair Corralation between YuantaP Shares and I Hwa

Assuming the 90 days trading horizon YuantaP shares Taiwan Top is expected to under-perform the I Hwa. But the etf apears to be less risky and, when comparing its historical volatility, YuantaP shares Taiwan Top is 1.49 times less risky than I Hwa. The etf trades about -0.11 of its potential returns per unit of risk. The I Hwa Industrial Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,555  in I Hwa Industrial Co on December 30, 2024 and sell it today you would lose (10.00) from holding I Hwa Industrial Co or give up 0.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

YuantaP shares Taiwan Top  vs.  I Hwa Industrial Co

YuantaP shares Taiwan

Risk-Adjusted Performance

Very Weak

Over the last 90 days YuantaP shares Taiwan Top has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the fund sophisticated investors.

I Hwa Industrial

Risk-Adjusted Performance

Very Weak

Over the last 90 days I Hwa Industrial Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, I Hwa is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with YuantaP Shares and I Hwa

The main advantage of trading using opposite YuantaP Shares and I Hwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, I Hwa 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 I Hwa will offset losses from the drop in I Hwa's long position.

The idea behind YuantaP shares Taiwan Top and I Hwa Industrial Co 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.

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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.