Correlation Between Yi Jinn and Taiwan Taffeta

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

By analyzing existing cross correlation between Yi Jinn Industrial and Taiwan Taffeta Fabric, you can compare the effects of market volatilities on Yi Jinn and Taiwan Taffeta 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 Yi Jinn with a short position of Taiwan Taffeta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yi Jinn and Taiwan Taffeta.

Diversification Opportunities for Yi Jinn and Taiwan Taffeta

0.51

Correlation Coefficient

Yi Jinn  Taiwan Taffeta

Very weak diversification

The 3 months correlation between 1457 and Taiwan is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Yi Jinn Industrial and Taiwan Taffeta Fabric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Taffeta Fabric and Yi Jinn 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 Yi Jinn Industrial are associated (or correlated) with Taiwan Taffeta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Taffeta Fabric has no effect on the direction of Yi Jinn i.e., Yi Jinn and Taiwan Taffeta go up and down completely randomly.

Pair Corralation between Yi Jinn and Taiwan Taffeta

Assuming the 90 days trading horizon Yi Jinn is expected to generate 22.16 times less return on investment than Taiwan Taffeta. But when comparing it to its historical volatility, Yi Jinn Industrial is 2.52 times less risky than Taiwan Taffeta. It trades about 0.02 of its potential returns per unit of risk. Taiwan Taffeta Fabric is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,490  in Taiwan Taffeta Fabric on December 27, 2024 and sell it today you would earn a total of  220.00  from holding Taiwan Taffeta Fabric or generate 14.77% return on investment over 90 days.

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

Yi Jinn Industrial  vs.  Taiwan Taffeta Fabric

Yi Jinn Industrial

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Yi Jinn Industrial are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Yi Jinn is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Taiwan Taffeta Fabric

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Taiwan Taffeta Fabric are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Taiwan Taffeta showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Yi Jinn and Taiwan Taffeta

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

The idea behind Yi Jinn Industrial and Taiwan Taffeta Fabric 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..