Correlation Between YuantaP Shares and China Times
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and China Times 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 China Times 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 China Times Publishing, you can compare the effects of market volatilities on YuantaP Shares and China Times 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 China Times. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and China Times.
Diversification Opportunities for YuantaP Shares and China Times
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between YuantaP and China is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Top and China Times Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Times Publishing 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 China Times. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Times Publishing has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and China Times go up and down completely randomly.
Pair Corralation between YuantaP Shares and China Times
Assuming the 90 days trading horizon YuantaP shares Taiwan Top is expected to generate 0.3 times more return on investment than China Times. However, YuantaP shares Taiwan Top is 3.33 times less risky than China Times. It trades about 0.15 of its potential returns per unit of risk. China Times Publishing is currently generating about 0.03 per unit of risk. If you would invest 17,475 in YuantaP shares Taiwan Top on September 6, 2024 and sell it today you would earn a total of 2,070 from holding YuantaP shares Taiwan Top or generate 11.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
YuantaP shares Taiwan Top vs. China Times Publishing
Performance |
Timeline |
YuantaP shares Taiwan |
China Times Publishing |
YuantaP Shares and China Times Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with YuantaP Shares and China Times
The main advantage of trading using opposite YuantaP Shares and China Times positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, China Times 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 China Times will offset losses from the drop in China Times' long position.YuantaP Shares vs. Ruentex Development Co | YuantaP Shares vs. Symtek Automation Asia | YuantaP Shares vs. CTCI Corp | YuantaP Shares vs. Information Technology Total |
China Times vs. Fubon MSCI Taiwan | China Times vs. YuantaP shares Taiwan Top | China Times vs. YuantaP shares Taiwan Electronics | China Times 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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