Correlation Between Gloria Material and Yuanta Financial

Can any of the company-specific risk be diversified away by investing in both Gloria Material and Yuanta Financial 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 Gloria Material and Yuanta Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gloria Material Technology and Yuanta Financial Holdings, you can compare the effects of market volatilities on Gloria Material and Yuanta Financial 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 Gloria Material with a short position of Yuanta Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gloria Material and Yuanta Financial.

Diversification Opportunities for Gloria Material and Yuanta Financial

-0.15

Correlation Coefficient

Gloria Material  Yuanta Financial

Good diversification

The 3 months correlation between Gloria and Yuanta is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Gloria Material Technology and Yuanta Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuanta Financial Holdings and Gloria Material 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 Gloria Material Technology are associated (or correlated) with Yuanta Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuanta Financial Holdings has no effect on the direction of Gloria Material i.e., Gloria Material and Yuanta Financial go up and down completely randomly.

Pair Corralation between Gloria Material and Yuanta Financial

Assuming the 90 days trading horizon Gloria Material Technology is expected to under-perform the Yuanta Financial. But the stock apears to be less risky and, when comparing its historical volatility, Gloria Material Technology is 1.17 times less risky than Yuanta Financial. The stock trades about -0.11 of its potential returns per unit of risk. The Yuanta Financial Holdings is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  3,495  in Yuanta Financial Holdings on October 8, 2024 and sell it today you would lose (20.00) from holding Yuanta Financial Holdings or give up 0.57% of portfolio value over 90 days.

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

Gloria Material Technology  vs.  Yuanta Financial Holdings

Gloria Material Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gloria Material Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Gloria Material is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Yuanta Financial Holdings

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yuanta Financial Holdings are ranked lower than 9 (%) 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.

Pair Trading with Gloria Material and Yuanta Financial

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

The idea behind Gloria Material Technology and Yuanta Financial Holdings 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.