Correlation Between YuantaP Shares and Genesis Technology

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

Diversification Opportunities for YuantaP Shares and Genesis Technology

-0.01

Correlation Coefficient

YuantaP Shares  Genesis Technology

Good diversification

The 3 months correlation between YuantaP and Genesis is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Top and Genesis Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesis Technology 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 Genesis Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesis Technology has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Genesis Technology go up and down completely randomly.

Pair Corralation between YuantaP Shares and Genesis Technology

Assuming the 90 days trading horizon YuantaP Shares is expected to generate 9.07 times less return on investment than Genesis Technology. But when comparing it to its historical volatility, YuantaP shares Taiwan Top is 2.25 times less risky than Genesis Technology. It trades about 0.03 of its potential returns per unit of risk. Genesis Technology is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  6,360  in Genesis Technology on December 2, 2024 and sell it today you would earn a total of  1,240  from holding Genesis Technology or generate 19.5% return on investment over 90 days.

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

YuantaP shares Taiwan Top  vs.  Genesis Technology

YuantaP shares Taiwan

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in YuantaP shares Taiwan Top are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Genesis Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Genesis Technology are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Genesis Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with YuantaP Shares and Genesis Technology

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

The idea behind YuantaP shares Taiwan Top and Genesis Technology 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.