Correlation Between YuantaP Shares and Channel Well

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

By analyzing existing cross correlation between YuantaP shares Taiwan Mid Cap and Channel Well Technology, you can compare the effects of market volatilities on YuantaP Shares and Channel Well 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 Channel Well. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Channel Well.

Diversification Opportunities for YuantaP Shares and Channel Well

0.37

Correlation Coefficient

YuantaP Shares  Channel Well

Weak diversification

The 3 months correlation between YuantaP and Channel is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Mid Cap and Channel Well Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Channel Well 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 Mid Cap are associated (or correlated) with Channel Well. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Channel Well Technology has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Channel Well go up and down completely randomly.

Pair Corralation between YuantaP Shares and Channel Well

Assuming the 90 days trading horizon YuantaP shares Taiwan Mid Cap is expected to under-perform the Channel Well. But the etf apears to be less risky and, when comparing its historical volatility, YuantaP shares Taiwan Mid Cap is 3.08 times less risky than Channel Well. The etf trades about -0.01 of its potential returns per unit of risk. The Channel Well Technology is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  6,960  in Channel Well Technology on December 24, 2024 and sell it today you would earn a total of  1,860  from holding Channel Well Technology or generate 26.72% return on investment over 90 days.

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

YuantaP shares Taiwan Mid Cap  vs.  Channel Well Technology

YuantaP shares Taiwan

Risk-Adjusted Performance

Very Weak

Over the last 90 days YuantaP shares Taiwan Mid Cap 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 latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Channel Well Technology

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Channel Well Technology are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Channel Well showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with YuantaP Shares and Channel Well

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

The idea behind YuantaP shares Taiwan Mid Cap and Channel Well 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.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.