Correlation Between Yuanta Financial and Cipherlab

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

Diversification Opportunities for Yuanta Financial and Cipherlab

-0.68

Correlation Coefficient

Yuanta Financial  Cipherlab

Excellent diversification

The 3 months correlation between Yuanta and Cipherlab is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta Financial Holdings and Cipherlab Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cipherlab 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 Cipherlab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cipherlab has no effect on the direction of Yuanta Financial i.e., Yuanta Financial and Cipherlab go up and down completely randomly.

Pair Corralation between Yuanta Financial and Cipherlab

Assuming the 90 days trading horizon Yuanta Financial Holdings is expected to under-perform the Cipherlab. But the stock apears to be less risky and, when comparing its historical volatility, Yuanta Financial Holdings is 1.28 times less risky than Cipherlab. The stock trades about -0.08 of its potential returns per unit of risk. The Cipherlab Co is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  2,420  in Cipherlab Co on October 4, 2024 and sell it today you would earn a total of  100.00  from holding Cipherlab Co or generate 4.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

Yuanta Financial Holdings  vs.  Cipherlab Co

Yuanta Financial Holdings

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yuanta Financial Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Yuanta Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Cipherlab

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cipherlab Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Cipherlab 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 Cipherlab

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

The idea behind Yuanta Financial Holdings and Cipherlab Co 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.