Correlation Between Yuanta 10 and Yuanta Daily

Can any of the company-specific risk be diversified away by investing in both Yuanta 10 and Yuanta Daily 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 10 and Yuanta Daily into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Yuanta 10 Investment and Yuanta Daily Taiwan, you can compare the effects of market volatilities on Yuanta 10 and Yuanta Daily 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 10 with a short position of Yuanta Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanta 10 and Yuanta Daily.

Diversification Opportunities for Yuanta 10 and Yuanta Daily

0.1

Correlation Coefficient

Yuanta 10  Yuanta Daily

Average diversification

The 3 months correlation between Yuanta and Yuanta is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta 10 Investment and Yuanta Daily Taiwan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuanta Daily Taiwan and Yuanta 10 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 10 Investment are associated (or correlated) with Yuanta Daily. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuanta Daily Taiwan has no effect on the direction of Yuanta 10 i.e., Yuanta 10 and Yuanta Daily go up and down completely randomly.

Pair Corralation between Yuanta 10 and Yuanta Daily

Assuming the 90 days trading horizon Yuanta 10 Investment is expected to under-perform the Yuanta Daily. But the etf apears to be less risky and, when comparing its historical volatility, Yuanta 10 Investment is 1.73 times less risky than Yuanta Daily. The etf trades about -0.43 of its potential returns per unit of risk. The Yuanta Daily Taiwan is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest  2,296  in Yuanta Daily Taiwan on October 10, 2024 and sell it today you would lose (79.00) from holding Yuanta Daily Taiwan or give up 3.44% of portfolio value over 90 days.

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

Yuanta 10 Investment  vs.  Yuanta Daily Taiwan

Yuanta 10 Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yuanta 10 Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Yuanta 10 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Yuanta Daily Taiwan

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yuanta Daily Taiwan are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Yuanta Daily sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Yuanta 10 and Yuanta Daily

The main advantage of trading using opposite Yuanta 10 and Yuanta Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuanta 10 position performs unexpectedly, Yuanta Daily 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 Daily will offset losses from the drop in Yuanta Daily's long position.

The idea behind Yuanta 10 Investment and Yuanta Daily Taiwan 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.

Check out your portfolio center.

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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.