Correlation Between Yuanta Daily and Yuanta Securities

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

By analyzing existing cross correlation between Yuanta Daily SP and Yuanta Securities Investment, you can compare the effects of market volatilities on Yuanta Daily and Yuanta Securities 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 Yuanta Daily with a short position of Yuanta Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanta Daily and Yuanta Securities.

Diversification Opportunities for Yuanta Daily and Yuanta Securities

0.31

Correlation Coefficient

Yuanta Daily  Yuanta Securities

Weak diversification

The 3 months correlation between Yuanta and Yuanta is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta Daily SP and Yuanta Securities Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuanta Securities and Yuanta Daily 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 Yuanta Daily SP are associated (or correlated) with Yuanta Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuanta Securities has no effect on the direction of Yuanta Daily i.e., Yuanta Daily and Yuanta Securities go up and down completely randomly.

Pair Corralation between Yuanta Daily and Yuanta Securities

Assuming the 90 days trading horizon Yuanta Daily SP is expected to under-perform the Yuanta Securities. But the etf apears to be less risky and, when comparing its historical volatility, Yuanta Daily SP is 1.36 times less risky than Yuanta Securities. The etf trades about -0.16 of its potential returns per unit of risk. The Yuanta Securities Investment is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  979.00  in Yuanta Securities Investment on September 13, 2024 and sell it today you would lose (45.00) from holding Yuanta Securities Investment or give up 4.6% of portfolio value over 90 days.

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

Yuanta Daily SP  vs.  Yuanta Securities Investment

Yuanta Daily SP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yuanta Daily SP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Yuanta Securities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yuanta Securities Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Yuanta Securities is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Yuanta Daily and Yuanta Securities

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

The idea behind Yuanta Daily SP and Yuanta Securities Investment 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.