Correlation Between Hung Sheng and Yuanta Financial
Can any of the company-specific risk be diversified away by investing in both Hung Sheng and Yuanta Financial 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 Hung Sheng and Yuanta Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hung Sheng Construction and Yuanta Financial Holdings, you can compare the effects of market volatilities on Hung Sheng and Yuanta Financial 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 Hung Sheng with a short position of Yuanta Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hung Sheng and Yuanta Financial.
Diversification Opportunities for Hung Sheng and Yuanta Financial
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hung and Yuanta is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Hung Sheng Construction and Yuanta Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuanta Financial Holdings and Hung Sheng 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 Hung Sheng Construction are associated (or correlated) with Yuanta Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuanta Financial Holdings has no effect on the direction of Hung Sheng i.e., Hung Sheng and Yuanta Financial go up and down completely randomly.
Pair Corralation between Hung Sheng and Yuanta Financial
Assuming the 90 days trading horizon Hung Sheng is expected to generate 5.0 times less return on investment than Yuanta Financial. In addition to that, Hung Sheng is 1.24 times more volatile than Yuanta Financial Holdings. It trades about 0.01 of its total potential returns per unit of risk. Yuanta Financial Holdings is currently generating about 0.07 per unit of volatility. If you would invest 2,275 in Yuanta Financial Holdings on October 23, 2024 and sell it today you would earn a total of 1,150 from holding Yuanta Financial Holdings or generate 50.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Hung Sheng Construction vs. Yuanta Financial Holdings
Performance |
Timeline |
Hung Sheng Construction |
Yuanta Financial Holdings |
Hung Sheng and Yuanta Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hung Sheng and Yuanta Financial
The main advantage of trading using opposite Hung Sheng and Yuanta Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hung Sheng position performs unexpectedly, Yuanta Financial 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 Financial will offset losses from the drop in Yuanta Financial's long position.Hung Sheng vs. Chainqui Construction Development | Hung Sheng vs. Kee Tai Properties | Hung Sheng vs. BES Engineering Co | Hung Sheng vs. Zinwell |
Yuanta Financial vs. Taichung Commercial Bank | Yuanta Financial vs. Far Eastern International | Yuanta Financial vs. Taiwan Business Bank | Yuanta Financial vs. Sinopac Financial Holdings |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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