Correlation Between Capital ICE and YuantaP Shares

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

By analyzing existing cross correlation between Capital ICE 15 and YuantaP shares Taiwan Top, you can compare the effects of market volatilities on Capital ICE and YuantaP Shares 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 ICE with a short position of YuantaP Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital ICE and YuantaP Shares.

Diversification Opportunities for Capital ICE and YuantaP Shares

-0.65

Correlation Coefficient

Capital ICE  YuantaP Shares

Excellent diversification

The 3 months correlation between Capital and YuantaP is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Capital ICE 15 and YuantaP shares Taiwan Top in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YuantaP shares Taiwan and Capital ICE 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 ICE 15 are associated (or correlated) with YuantaP Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YuantaP shares Taiwan has no effect on the direction of Capital ICE i.e., Capital ICE and YuantaP Shares go up and down completely randomly.

Pair Corralation between Capital ICE and YuantaP Shares

Assuming the 90 days trading horizon Capital ICE 15 is expected to generate 0.53 times more return on investment than YuantaP Shares. However, Capital ICE 15 is 1.88 times less risky than YuantaP Shares. It trades about 0.07 of its potential returns per unit of risk. YuantaP shares Taiwan Top is currently generating about -0.08 per unit of risk. If you would invest  3,564  in Capital ICE 15 on December 27, 2024 and sell it today you would earn a total of  88.00  from holding Capital ICE 15 or generate 2.47% return on investment over 90 days.

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

Capital ICE 15  vs.  YuantaP shares Taiwan Top

Capital ICE 15

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Capital ICE 15 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Capital ICE is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

YuantaP shares Taiwan

Risk-Adjusted Performance

Very Weak

Over the last 90 days YuantaP shares Taiwan Top has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak 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.

Pair Trading with Capital ICE and YuantaP Shares

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

The idea behind Capital ICE 15 and YuantaP shares Taiwan Top 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.