Correlation Between Yieh United and Chialin Precision
Can any of the company-specific risk be diversified away by investing in both Yieh United and Chialin Precision 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 Yieh United and Chialin Precision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yieh United Steel and Chialin Precision Industrial, you can compare the effects of market volatilities on Yieh United and Chialin Precision 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 Yieh United with a short position of Chialin Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yieh United and Chialin Precision.
Diversification Opportunities for Yieh United and Chialin Precision
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yieh and Chialin is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Yieh United Steel and Chialin Precision Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chialin Precision and Yieh United 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 Yieh United Steel are associated (or correlated) with Chialin Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chialin Precision has no effect on the direction of Yieh United i.e., Yieh United and Chialin Precision go up and down completely randomly.
Pair Corralation between Yieh United and Chialin Precision
Assuming the 90 days trading horizon Yieh United Steel is expected to generate 1.69 times more return on investment than Chialin Precision. However, Yieh United is 1.69 times more volatile than Chialin Precision Industrial. It trades about 0.04 of its potential returns per unit of risk. Chialin Precision Industrial is currently generating about -0.05 per unit of risk. If you would invest 619.00 in Yieh United Steel on December 22, 2024 and sell it today you would earn a total of 22.00 from holding Yieh United Steel or generate 3.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Yieh United Steel vs. Chialin Precision Industrial
Performance |
Timeline |
Yieh United Steel |
Chialin Precision |
Yieh United and Chialin Precision Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Yieh United and Chialin Precision
The main advantage of trading using opposite Yieh United and Chialin Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yieh United position performs unexpectedly, Chialin Precision 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 Chialin Precision will offset losses from the drop in Chialin Precision's long position.Yieh United vs. Taishin Financial Holding | Yieh United vs. Datavan International | Yieh United vs. Transcend Information | Yieh United vs. K Way Information |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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