Correlation Between Yuanta Financial and Hua Nan
Can any of the company-specific risk be diversified away by investing in both Yuanta Financial and Hua Nan 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 Yuanta Financial and Hua Nan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yuanta Financial Holdings and Hua Nan Financial, you can compare the effects of market volatilities on Yuanta Financial and Hua Nan 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 Yuanta Financial with a short position of Hua Nan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanta Financial and Hua Nan.
Diversification Opportunities for Yuanta Financial and Hua Nan
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Yuanta and Hua is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta Financial Holdings and Hua Nan Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hua Nan Financial and Yuanta Financial 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 Yuanta Financial Holdings are associated (or correlated) with Hua Nan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hua Nan Financial has no effect on the direction of Yuanta Financial i.e., Yuanta Financial and Hua Nan go up and down completely randomly.
Pair Corralation between Yuanta Financial and Hua Nan
Assuming the 90 days trading horizon Yuanta Financial is expected to generate 9.36 times less return on investment than Hua Nan. In addition to that, Yuanta Financial is 1.34 times more volatile than Hua Nan Financial. It trades about 0.01 of its total potential returns per unit of risk. Hua Nan Financial is currently generating about 0.13 per unit of volatility. If you would invest 2,655 in Hua Nan Financial on December 28, 2024 and sell it today you would earn a total of 155.00 from holding Hua Nan Financial or generate 5.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Yuanta Financial Holdings vs. Hua Nan Financial
Performance |
Timeline |
Yuanta Financial Holdings |
Hua Nan Financial |
Yuanta Financial and Hua Nan Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Yuanta Financial and Hua Nan
The main advantage of trading using opposite Yuanta Financial and Hua Nan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuanta Financial position performs unexpectedly, Hua Nan 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 Hua Nan will offset losses from the drop in Hua Nan's long position.Yuanta Financial vs. CTBC Financial Holding | Yuanta Financial vs. Fubon Financial Holding | Yuanta Financial vs. Cathay Financial Holding | Yuanta Financial vs. Mega Financial Holding |
Hua Nan vs. First Financial Holding | Hua Nan vs. Mega Financial Holding | Hua Nan vs. CTBC Financial Holding | Hua Nan vs. ESUN Financial Holding |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |