Correlation Between YuantaP Shares and Hung Ching

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

By analyzing existing cross correlation between YuantaP shares Taiwan Electronics and Hung Ching Development, you can compare the effects of market volatilities on YuantaP Shares and Hung Ching 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 Hung Ching. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Hung Ching.

Diversification Opportunities for YuantaP Shares and Hung Ching

0.4

Correlation Coefficient

YuantaP Shares  Hung Ching

Very weak diversification

The 3 months correlation between YuantaP and Hung is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Electron and Hung Ching Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hung Ching Development 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 Electronics are associated (or correlated) with Hung Ching. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hung Ching Development has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Hung Ching go up and down completely randomly.

Pair Corralation between YuantaP Shares and Hung Ching

Assuming the 90 days trading horizon YuantaP shares Taiwan Electronics is expected to under-perform the Hung Ching. But the etf apears to be less risky and, when comparing its historical volatility, YuantaP shares Taiwan Electronics is 1.32 times less risky than Hung Ching. The etf trades about -0.07 of its potential returns per unit of risk. The Hung Ching Development is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  3,735  in Hung Ching Development on December 21, 2024 and sell it today you would lose (140.00) from holding Hung Ching Development or give up 3.75% of portfolio value over 90 days.

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

YuantaP shares Taiwan Electron  vs.  Hung Ching Development

YuantaP shares Taiwan

Risk-Adjusted Performance

Very Weak

Over the last 90 days YuantaP shares Taiwan Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Etf's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the fund sophisticated investors.

Hung Ching Development

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hung Ching Development has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Hung Ching is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with YuantaP Shares and Hung Ching

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

The idea behind YuantaP shares Taiwan Electronics and Hung Ching Development 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.