Correlation Between YuantaP Shares and Anderson Industrial

Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Anderson Industrial 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 Anderson Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between YuantaP shares Taiwan Electronics and Anderson Industrial Corp, you can compare the effects of market volatilities on YuantaP Shares and Anderson Industrial 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 Anderson Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Anderson Industrial.

Diversification Opportunities for YuantaP Shares and Anderson Industrial

0.68

Correlation Coefficient

YuantaP Shares  Anderson Industrial

Poor diversification

The 3 months correlation between YuantaP and Anderson is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Electron and Anderson Industrial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anderson Industrial Corp 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 Electronics are associated (or correlated) with Anderson Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anderson Industrial Corp has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Anderson Industrial go up and down completely randomly.

Pair Corralation between YuantaP Shares and Anderson Industrial

Assuming the 90 days trading horizon YuantaP Shares is expected to generate 2.85 times less return on investment than Anderson Industrial. But when comparing it to its historical volatility, YuantaP shares Taiwan Electronics is 3.09 times less risky than Anderson Industrial. It trades about 0.09 of its potential returns per unit of risk. Anderson Industrial Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,350  in Anderson Industrial Corp on September 13, 2024 and sell it today you would earn a total of  215.00  from holding Anderson Industrial Corp or generate 15.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

YuantaP shares Taiwan Electron  vs.  Anderson Industrial Corp

YuantaP shares Taiwan

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in YuantaP shares Taiwan Electronics are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, YuantaP Shares may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Anderson Industrial Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Anderson Industrial Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Anderson Industrial showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with YuantaP Shares and Anderson Industrial

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

The idea behind YuantaP shares Taiwan Electronics and Anderson Industrial Corp 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 CEOs Directory module to screen CEOs from public companies around the world.