Correlation Between Yang Ming and Level Biotechnology
Can any of the company-specific risk be diversified away by investing in both Yang Ming and Level Biotechnology 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 Level Biotechnology 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 Level Biotechnology, you can compare the effects of market volatilities on Yang Ming and Level Biotechnology 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 Level Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and Level Biotechnology.
Diversification Opportunities for Yang Ming and Level Biotechnology
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yang and Level is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and Level Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Level Biotechnology 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 Level Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Level Biotechnology has no effect on the direction of Yang Ming i.e., Yang Ming and Level Biotechnology go up and down completely randomly.
Pair Corralation between Yang Ming and Level Biotechnology
Assuming the 90 days trading horizon Yang Ming Marine is expected to under-perform the Level Biotechnology. In addition to that, Yang Ming is 3.37 times more volatile than Level Biotechnology. It trades about -0.02 of its total potential returns per unit of risk. Level Biotechnology is currently generating about 0.11 per unit of volatility. If you would invest 3,220 in Level Biotechnology on December 4, 2024 and sell it today you would earn a total of 125.00 from holding Level Biotechnology or generate 3.88% 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. Level Biotechnology
Performance |
Timeline |
Yang Ming Marine |
Level Biotechnology |
Yang Ming and Level Biotechnology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Yang Ming and Level Biotechnology
The main advantage of trading using opposite Yang Ming and Level Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, Level Biotechnology 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 Level Biotechnology will offset losses from the drop in Level Biotechnology's 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 |
Level Biotechnology vs. Prime Oil Chemical | Level Biotechnology vs. Evermore Chemical Industry | Level Biotechnology vs. Taiwan Speciality Chemicals | Level Biotechnology vs. Standard Foods Corp |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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