Correlation Between YuantaP Shares and Hwa Fong
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Hwa Fong 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 YuantaP Shares and Hwa Fong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YuantaP shares Taiwan Top and Hwa Fong Rubber, you can compare the effects of market volatilities on YuantaP Shares and Hwa Fong 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 YuantaP Shares with a short position of Hwa Fong. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Hwa Fong.
Diversification Opportunities for YuantaP Shares and Hwa Fong
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between YuantaP and Hwa is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Top and Hwa Fong Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwa Fong Rubber and YuantaP Shares 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 YuantaP shares Taiwan Top are associated (or correlated) with Hwa Fong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwa Fong Rubber has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Hwa Fong go up and down completely randomly.
Pair Corralation between YuantaP Shares and Hwa Fong
Assuming the 90 days trading horizon YuantaP shares Taiwan Top is expected to generate 1.1 times more return on investment than Hwa Fong. However, YuantaP Shares is 1.1 times more volatile than Hwa Fong Rubber. It trades about 0.11 of its potential returns per unit of risk. Hwa Fong Rubber is currently generating about 0.05 per unit of risk. If you would invest 10,417 in YuantaP shares Taiwan Top on September 14, 2024 and sell it today you would earn a total of 9,113 from holding YuantaP shares Taiwan Top or generate 87.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.75% |
Values | Daily Returns |
YuantaP shares Taiwan Top vs. Hwa Fong Rubber
Performance |
Timeline |
YuantaP shares Taiwan |
Hwa Fong Rubber |
YuantaP Shares and Hwa Fong Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with YuantaP Shares and Hwa Fong
The main advantage of trading using opposite YuantaP Shares and Hwa Fong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Hwa Fong 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 Hwa Fong will offset losses from the drop in Hwa Fong's long position.YuantaP Shares vs. YuantaP shares MSCI Taiwan | YuantaP Shares vs. YuantaP shares Taiwan GreTai | YuantaP Shares vs. YuantaP shares SSE50 | YuantaP Shares vs. YuantaP shares Taiwan Mid Cap |
Hwa Fong vs. Feng Tay Enterprises | Hwa Fong vs. Ruentex Development Co | Hwa Fong vs. WiseChip Semiconductor | Hwa Fong vs. Novatek Microelectronics Corp |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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