Correlation Between Yuanta Global and Yuanta Securities

Can any of the company-specific risk be diversified away by investing in both Yuanta Global 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 Global 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 Global NexGen and Yuanta Securities Investment, you can compare the effects of market volatilities on Yuanta Global 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 Global with a short position of Yuanta Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanta Global and Yuanta Securities.

Diversification Opportunities for Yuanta Global and Yuanta Securities

-0.46

Correlation Coefficient

Yuanta Global  Yuanta Securities

Very good diversification

The 3 months correlation between Yuanta and Yuanta is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta Global NexGen 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 Global 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 Global NexGen 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 Global i.e., Yuanta Global and Yuanta Securities go up and down completely randomly.

Pair Corralation between Yuanta Global and Yuanta Securities

Assuming the 90 days trading horizon Yuanta Global NexGen is expected to under-perform the Yuanta Securities. In addition to that, Yuanta Global is 1.24 times more volatile than Yuanta Securities Investment. It trades about -0.05 of its total potential returns per unit of risk. Yuanta Securities Investment is currently generating about -0.03 per unit of volatility. If you would invest  949.00  in Yuanta Securities Investment on September 13, 2024 and sell it today you would lose (15.00) from holding Yuanta Securities Investment or give up 1.58% of portfolio value over 90 days.

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

Yuanta Global NexGen  vs.  Yuanta Securities Investment

Yuanta Global NexGen

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Yuanta Global NexGen are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Yuanta Global is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private 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 Global and Yuanta Securities

The main advantage of trading using opposite Yuanta Global and Yuanta Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuanta Global 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 Global NexGen 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.