Correlation Between Capital Taiex and Yuanta STOXX

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

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

Diversification Opportunities for Capital Taiex and Yuanta STOXX

0.0

Correlation Coefficient

Capital Taiex  Yuanta STOXX

Pay attention - limited upside

The 3 months correlation between Capital and Yuanta is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Capital Taiex Daily and Yuanta STOXX Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuanta STOXX Global and Capital Taiex 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 Capital Taiex Daily are associated (or correlated) with Yuanta STOXX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuanta STOXX Global has no effect on the direction of Capital Taiex i.e., Capital Taiex and Yuanta STOXX go up and down completely randomly.

Pair Corralation between Capital Taiex and Yuanta STOXX

If you would invest  0.00  in Capital Taiex Daily on October 7, 2024 and sell it today you would earn a total of  0.00  from holding Capital Taiex Daily or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Capital Taiex Daily  vs.  Yuanta STOXX Global

Capital Taiex Daily

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Capital Taiex Daily has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Yuanta STOXX Global

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yuanta STOXX Global are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Yuanta STOXX may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Capital Taiex and Yuanta STOXX

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

The idea behind Capital Taiex Daily and Yuanta STOXX Global 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 Global Correlations module to find global opportunities by holding instruments from different markets.