Correlation Between YuantaP Shares and Sentronic International

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

Diversification Opportunities for YuantaP Shares and Sentronic International

0.33

Correlation Coefficient

YuantaP Shares  Sentronic International

Weak diversification

The 3 months correlation between YuantaP and Sentronic is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Mid Cap and Sentronic International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentronic International 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 Sentronic International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentronic International has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Sentronic International go up and down completely randomly.

Pair Corralation between YuantaP Shares and Sentronic International

Assuming the 90 days trading horizon YuantaP shares Taiwan Mid Cap is expected to generate 0.4 times more return on investment than Sentronic International. However, YuantaP shares Taiwan Mid Cap is 2.53 times less risky than Sentronic International. It trades about 0.25 of its potential returns per unit of risk. Sentronic International is currently generating about 0.08 per unit of risk. If you would invest  7,560  in YuantaP shares Taiwan Mid Cap on December 5, 2024 and sell it today you would earn a total of  280.00  from holding YuantaP shares Taiwan Mid Cap or generate 3.7% 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.  Sentronic International

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.

Sentronic International

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sentronic International are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Sentronic International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with YuantaP Shares and Sentronic International

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

The idea behind YuantaP shares Taiwan Mid Cap and Sentronic International 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.