Correlation Between Yuanta Securities and Capital Taiex

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

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

Diversification Opportunities for Yuanta Securities and Capital Taiex

-0.42

Correlation Coefficient

Yuanta Securities  Capital Taiex

Very good diversification

The 3 months correlation between Yuanta and Capital is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta Securities Investment and Capital Taiex Daily in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Taiex Daily and Yuanta Securities 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 Securities Investment are associated (or correlated) with Capital Taiex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Taiex Daily has no effect on the direction of Yuanta Securities i.e., Yuanta Securities and Capital Taiex go up and down completely randomly.

Pair Corralation between Yuanta Securities and Capital Taiex

Assuming the 90 days trading horizon Yuanta Securities Investment is expected to under-perform the Capital Taiex. But the etf apears to be less risky and, when comparing its historical volatility, Yuanta Securities Investment is 1.55 times less risky than Capital Taiex. The etf trades about -0.29 of its potential returns per unit of risk. The Capital Taiex Daily is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  222.00  in Capital Taiex Daily on December 27, 2024 and sell it today you would earn a total of  9.00  from holding Capital Taiex Daily or generate 4.05% return on investment over 90 days.

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

Yuanta Securities Investment  vs.  Capital Taiex Daily

Yuanta Securities

Risk-Adjusted Performance

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 weak performance in the last few months, the Etf's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Capital Taiex Daily

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Capital Taiex Daily are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Capital Taiex 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 Securities and Capital Taiex

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

The idea behind Yuanta Securities Investment and Capital Taiex Daily 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.