Correlation Between Chung Hwa and Yeou Yih

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

By analyzing existing cross correlation between Chung Hwa Pulp and Yeou Yih Steel, you can compare the effects of market volatilities on Chung Hwa and Yeou Yih 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 Chung Hwa with a short position of Yeou Yih. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chung Hwa and Yeou Yih.

Diversification Opportunities for Chung Hwa and Yeou Yih

0.0

Correlation Coefficient

Chung Hwa  Yeou Yih

Pay attention - limited upside

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

Pair Corralation between Chung Hwa and Yeou Yih

If you would invest  0.00  in Chung Hwa Pulp on October 4, 2024 and sell it today you would earn a total of  0.00  from holding Chung Hwa Pulp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Chung Hwa Pulp  vs.  Yeou Yih Steel

Chung Hwa Pulp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chung Hwa Pulp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Chung Hwa is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Yeou Yih Steel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yeou Yih Steel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Chung Hwa and Yeou Yih

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

The idea behind Chung Hwa Pulp and Yeou Yih Steel 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.