Correlation Between Yang Ming and Analog Integrations

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

Diversification Opportunities for Yang Ming and Analog Integrations

0.19

Correlation Coefficient

Yang Ming  Analog Integrations

Average diversification

The 3 months correlation between Yang and Analog is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and Analog Integrations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Analog Integrations 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 Analog Integrations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Analog Integrations has no effect on the direction of Yang Ming i.e., Yang Ming and Analog Integrations go up and down completely randomly.

Pair Corralation between Yang Ming and Analog Integrations

Assuming the 90 days trading horizon Yang Ming is expected to generate 1.1 times less return on investment than Analog Integrations. But when comparing it to its historical volatility, Yang Ming Marine is 2.04 times less risky than Analog Integrations. It trades about 0.31 of its potential returns per unit of risk. Analog Integrations is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  9,350  in Analog Integrations on December 4, 2024 and sell it today you would earn a total of  950.00  from holding Analog Integrations or generate 10.16% return on investment over 90 days.

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

Yang Ming Marine  vs.  Analog Integrations

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.

Analog Integrations

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Analog Integrations are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Analog Integrations may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Yang Ming and Analog Integrations

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

The idea behind Yang Ming Marine and Analog Integrations 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.