Correlation Between Yang Ming and Fitipower Integrated

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

Diversification Opportunities for Yang Ming and Fitipower Integrated

0.52

Correlation Coefficient

Yang Ming  Fitipower Integrated

Very weak diversification

The 3 months correlation between Yang and Fitipower is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and Fitipower Integrated Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fitipower Integrated 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 Fitipower Integrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fitipower Integrated has no effect on the direction of Yang Ming i.e., Yang Ming and Fitipower Integrated go up and down completely randomly.

Pair Corralation between Yang Ming and Fitipower Integrated

Assuming the 90 days trading horizon Yang Ming Marine is expected to under-perform the Fitipower Integrated. In addition to that, Yang Ming is 2.08 times more volatile than Fitipower Integrated Technology. It trades about 0.0 of its total potential returns per unit of risk. Fitipower Integrated Technology is currently generating about 0.01 per unit of volatility. If you would invest  23,450  in Fitipower Integrated Technology on December 2, 2024 and sell it today you would earn a total of  50.00  from holding Fitipower Integrated Technology or generate 0.21% return on investment over 90 days.

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

Yang Ming Marine  vs.  Fitipower Integrated Technolog

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.

Fitipower Integrated

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Yang Ming and Fitipower Integrated

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

The idea behind Yang Ming Marine and Fitipower Integrated Technology 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..