Correlation Between YuantaP Shares and AMPACS Corp

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

Diversification Opportunities for YuantaP Shares and AMPACS Corp

-0.53

Correlation Coefficient

YuantaP Shares  AMPACS Corp

Excellent diversification

The 3 months correlation between YuantaP and AMPACS is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Electron and AMPACS Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMPACS Corp 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 AMPACS Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMPACS Corp has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and AMPACS Corp go up and down completely randomly.

Pair Corralation between YuantaP Shares and AMPACS Corp

Assuming the 90 days trading horizon YuantaP shares Taiwan Electronics is expected to generate 0.56 times more return on investment than AMPACS Corp. However, YuantaP shares Taiwan Electronics is 1.79 times less risky than AMPACS Corp. It trades about 0.1 of its potential returns per unit of risk. AMPACS Corp is currently generating about -0.31 per unit of risk. If you would invest  10,100  in YuantaP shares Taiwan Electronics on September 16, 2024 and sell it today you would earn a total of  240.00  from holding YuantaP shares Taiwan Electronics or generate 2.38% return on investment over 90 days.

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

YuantaP shares Taiwan Electron  vs.  AMPACS Corp

YuantaP shares Taiwan

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in YuantaP shares Taiwan Electronics are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, YuantaP Shares may actually be approaching a critical reversion point that can send shares even higher in January 2025.

AMPACS Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMPACS Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with YuantaP Shares and AMPACS Corp

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

The idea behind YuantaP shares Taiwan Electronics and AMPACS Corp 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.