Correlation Between Yang Ming and VIA Technologies
Can any of the company-specific risk be diversified away by investing in both Yang Ming and VIA Technologies 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 Yang Ming and VIA Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yang Ming Marine and VIA Technologies, you can compare the effects of market volatilities on Yang Ming and VIA Technologies 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 Yang Ming with a short position of VIA Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and VIA Technologies.
Diversification Opportunities for Yang Ming and VIA Technologies
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yang and VIA is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and VIA Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIA Technologies and Yang Ming 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 Yang Ming Marine are associated (or correlated) with VIA Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIA Technologies has no effect on the direction of Yang Ming i.e., Yang Ming and VIA Technologies go up and down completely randomly.
Pair Corralation between Yang Ming and VIA Technologies
Assuming the 90 days trading horizon Yang Ming Marine is expected to generate 0.75 times more return on investment than VIA Technologies. However, Yang Ming Marine is 1.33 times less risky than VIA Technologies. It trades about 0.16 of its potential returns per unit of risk. VIA Technologies is currently generating about -0.06 per unit of risk. If you would invest 6,060 in Yang Ming Marine on September 9, 2024 and sell it today you would earn a total of 1,500 from holding Yang Ming Marine or generate 24.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Yang Ming Marine vs. VIA Technologies
Performance |
Timeline |
Yang Ming Marine |
VIA Technologies |
Yang Ming and VIA Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Yang Ming and VIA Technologies
The main advantage of trading using opposite Yang Ming and VIA Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, VIA Technologies 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 VIA Technologies will offset losses from the drop in VIA Technologies' long position.Yang Ming vs. Evergreen Marine Corp | Yang Ming vs. Wan Hai Lines | Yang Ming vs. China Airlines | Yang Ming vs. Eva Airways Corp |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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