Correlation Between YuantaP Shares and ASRock

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

Diversification Opportunities for YuantaP Shares and ASRock

0.75

Correlation Coefficient

YuantaP Shares  ASRock

Poor diversification

The 3 months correlation between YuantaP and ASRock is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Mid Cap and ASRock Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASRock Inc 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 ASRock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASRock Inc has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and ASRock go up and down completely randomly.

Pair Corralation between YuantaP Shares and ASRock

Assuming the 90 days trading horizon YuantaP Shares is expected to generate 3.28 times less return on investment than ASRock. But when comparing it to its historical volatility, YuantaP shares Taiwan Mid Cap is 3.46 times less risky than ASRock. It trades about 0.06 of its potential returns per unit of risk. ASRock Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  23,400  in ASRock Inc on December 1, 2024 and sell it today you would earn a total of  1,550  from holding ASRock Inc or generate 6.62% return on investment over 90 days.

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

YuantaP shares Taiwan Mid Cap  vs.  ASRock Inc

YuantaP shares Taiwan

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in YuantaP shares Taiwan Mid Cap are ranked lower than 4 (%) 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 latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

ASRock Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ASRock Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, ASRock may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with YuantaP Shares and ASRock

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

The idea behind YuantaP shares Taiwan Mid Cap and ASRock Inc 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.