Correlation Between Yuanta Financial and SS Healthcare

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

Diversification Opportunities for Yuanta Financial and SS Healthcare

-0.26

Correlation Coefficient

Yuanta Financial  SS Healthcare

Very good diversification

The 3 months correlation between Yuanta and 4198 is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta Financial Holdings and SS Healthcare Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SS Healthcare Holding 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 SS Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SS Healthcare Holding has no effect on the direction of Yuanta Financial i.e., Yuanta Financial and SS Healthcare go up and down completely randomly.

Pair Corralation between Yuanta Financial and SS Healthcare

Assuming the 90 days trading horizon Yuanta Financial Holdings is expected to generate 0.34 times more return on investment than SS Healthcare. However, Yuanta Financial Holdings is 2.95 times less risky than SS Healthcare. It trades about 0.23 of its potential returns per unit of risk. SS Healthcare Holding is currently generating about -0.02 per unit of risk. If you would invest  2,985  in Yuanta Financial Holdings on September 12, 2024 and sell it today you would earn a total of  510.00  from holding Yuanta Financial Holdings or generate 17.09% return on investment over 90 days.

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

Yuanta Financial Holdings  vs.  SS Healthcare Holding

Yuanta Financial Holdings

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Yuanta Financial Holdings are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Yuanta Financial showed solid returns over the last few months and may actually be approaching a breakup point.

SS Healthcare Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SS Healthcare Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, SS Healthcare 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 Yuanta Financial and SS Healthcare

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

The idea behind Yuanta Financial Holdings and SS Healthcare Holding 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.