Correlation Between Yuanta Financial and Aker Technology

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

Diversification Opportunities for Yuanta Financial and Aker Technology

0.29

Correlation Coefficient

Yuanta Financial  Aker Technology

Modest diversification

The 3 months correlation between Yuanta and Aker is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta Financial Holdings and Aker Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aker Technology 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 Aker Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aker Technology has no effect on the direction of Yuanta Financial i.e., Yuanta Financial and Aker Technology go up and down completely randomly.

Pair Corralation between Yuanta Financial and Aker Technology

Assuming the 90 days trading horizon Yuanta Financial Holdings is expected to generate 0.53 times more return on investment than Aker Technology. However, Yuanta Financial Holdings is 1.87 times less risky than Aker Technology. It trades about 0.03 of its potential returns per unit of risk. Aker Technology Co is currently generating about -0.07 per unit of risk. If you would invest  3,440  in Yuanta Financial Holdings on December 22, 2024 and sell it today you would earn a total of  65.00  from holding Yuanta Financial Holdings or generate 1.89% 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.  Aker Technology Co

Yuanta Financial Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Yuanta Financial Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Yuanta Financial is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Aker Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aker Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Yuanta Financial and Aker Technology

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

The idea behind Yuanta Financial Holdings and Aker Technology 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.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.