Correlation Between Yang Ming and Catcher Technology

Can any of the company-specific risk be diversified away by investing in both Yang Ming and Catcher Technology 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 Catcher Technology 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 Catcher Technology Co, you can compare the effects of market volatilities on Yang Ming and Catcher Technology 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 Catcher Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and Catcher Technology.

Diversification Opportunities for Yang Ming and Catcher Technology

-0.17

Correlation Coefficient

Yang Ming  Catcher Technology

Good diversification

The 3 months correlation between Yang and Catcher is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and Catcher Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catcher Technology 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 Catcher Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catcher Technology has no effect on the direction of Yang Ming i.e., Yang Ming and Catcher Technology go up and down completely randomly.

Pair Corralation between Yang Ming and Catcher Technology

Assuming the 90 days trading horizon Yang Ming is expected to generate 11.48 times less return on investment than Catcher Technology. In addition to that, Yang Ming is 2.3 times more volatile than Catcher Technology Co. It trades about 0.01 of its total potential returns per unit of risk. Catcher Technology Co is currently generating about 0.23 per unit of volatility. If you would invest  19,300  in Catcher Technology Co on December 30, 2024 and sell it today you would earn a total of  2,050  from holding Catcher Technology Co or generate 10.62% return on investment over 90 days.

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

Yang Ming Marine  vs.  Catcher Technology Co

Yang Ming Marine

Risk-Adjusted Performance

Very Weak

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

Catcher Technology

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Catcher Technology Co are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Catcher Technology may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Yang Ming and Catcher Technology

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

The idea behind Yang Ming Marine and Catcher Technology Co 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.