Correlation Between YuantaP Shares and Hsin Yung

Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Hsin Yung 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 Hsin Yung 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 Hsin Yung Chien, you can compare the effects of market volatilities on YuantaP Shares and Hsin Yung 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 Hsin Yung. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Hsin Yung.

Diversification Opportunities for YuantaP Shares and Hsin Yung

-0.44

Correlation Coefficient

YuantaP Shares  Hsin Yung

Very good diversification

The 3 months correlation between YuantaP and Hsin is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Top and Hsin Yung Chien in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hsin Yung Chien 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 Hsin Yung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hsin Yung Chien has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Hsin Yung go up and down completely randomly.

Pair Corralation between YuantaP Shares and Hsin Yung

Assuming the 90 days trading horizon YuantaP shares Taiwan Top is expected to generate 1.58 times more return on investment than Hsin Yung. However, YuantaP Shares is 1.58 times more volatile than Hsin Yung Chien. It trades about 0.08 of its potential returns per unit of risk. Hsin Yung Chien is currently generating about -0.19 per unit of risk. If you would invest  18,884  in YuantaP shares Taiwan Top on October 21, 2024 and sell it today you would earn a total of  746.00  from holding YuantaP shares Taiwan Top or generate 3.95% return on investment 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.  Hsin Yung Chien

YuantaP shares Taiwan

Risk-Adjusted Performance

0 of 100

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 fairly stable basic indicators, YuantaP Shares is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Hsin Yung Chien

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hsin Yung Chien has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with YuantaP Shares and Hsin Yung

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

The idea behind YuantaP shares Taiwan Top and Hsin Yung Chien 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.

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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.