Correlation Between Yuanta Futures and Compal Electronics

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Can any of the company-specific risk be diversified away by investing in both Yuanta Futures and Compal Electronics 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 Futures and Compal Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yuanta Futures Co and Compal Electronics, you can compare the effects of market volatilities on Yuanta Futures and Compal Electronics 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 Futures with a short position of Compal Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanta Futures and Compal Electronics.

Diversification Opportunities for Yuanta Futures and Compal Electronics

YuantaCompalDiversified AwayYuantaCompalDiversified Away100%
0.47
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Yuanta and Compal is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta Futures Co and Compal Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compal Electronics and Yuanta Futures 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 Futures Co are associated (or correlated) with Compal Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compal Electronics has no effect on the direction of Yuanta Futures i.e., Yuanta Futures and Compal Electronics go up and down completely randomly.

Pair Corralation between Yuanta Futures and Compal Electronics

Assuming the 90 days trading horizon Yuanta Futures Co is expected to under-perform the Compal Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Yuanta Futures Co is 2.56 times less risky than Compal Electronics. The stock trades about -0.07 of its potential returns per unit of risk. The Compal Electronics is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  3,490  in Compal Electronics on October 10, 2024 and sell it today you would earn a total of  185.00  from holding Compal Electronics or generate 5.3% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Yuanta Futures Co  vs.  Compal Electronics

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec 0510
JavaScript chart by amCharts 3.21.156023 2324
       Timeline  
Yuanta Futures 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Yuanta Futures Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Yuanta Futures is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan85868788899091
Compal Electronics 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Compal Electronics are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Compal Electronics is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan353637383940

Yuanta Futures and Compal Electronics Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.32-1.74-1.16-0.580.00.581.161.742.32 0.10.20.30.40.50.60.7
JavaScript chart by amCharts 3.21.156023 2324
       Returns  

Pair Trading with Yuanta Futures and Compal Electronics

The main advantage of trading using opposite Yuanta Futures and Compal Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuanta Futures position performs unexpectedly, Compal Electronics 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 Compal Electronics will offset losses from the drop in Compal Electronics' long position.
The idea behind Yuanta Futures Co and Compal Electronics 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.

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