Correlation Between Yang Ming and Brogent Technologies

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

Diversification Opportunities for Yang Ming and Brogent Technologies

-0.59

Correlation Coefficient

Yang Ming  Brogent Technologies

Excellent diversification

The 3 months correlation between Yang and Brogent is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and Brogent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brogent 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 Brogent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brogent Technologies has no effect on the direction of Yang Ming i.e., Yang Ming and Brogent Technologies go up and down completely randomly.

Pair Corralation between Yang Ming and Brogent Technologies

Assuming the 90 days trading horizon Yang Ming Marine is expected to generate 1.16 times more return on investment than Brogent Technologies. However, Yang Ming is 1.16 times more volatile than Brogent Technologies. It trades about 0.0 of its potential returns per unit of risk. Brogent Technologies is currently generating about -0.21 per unit of risk. If you would invest  6,850  in Yang Ming Marine on October 23, 2024 and sell it today you would lose (140.00) from holding Yang Ming Marine or give up 2.04% of portfolio value over 90 days.

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

Yang Ming Marine  vs.  Brogent Technologies

Yang Ming Marine

Risk-Adjusted Performance

0 of 100

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.

Brogent Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brogent Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Yang Ming and Brogent Technologies

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

The idea behind Yang Ming Marine and Brogent Technologies 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.