Correlation Between Paradigm and Yuanta Daily

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

By analyzing existing cross correlation between Paradigm SP GSCI and Yuanta Daily CSI, you can compare the effects of market volatilities on Paradigm and Yuanta Daily 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 Paradigm with a short position of Yuanta Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paradigm and Yuanta Daily.

Diversification Opportunities for Paradigm and Yuanta Daily

0.26

Correlation Coefficient

Paradigm  Yuanta Daily

Modest diversification

The 3 months correlation between Paradigm and Yuanta is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Paradigm SP GSCI and Yuanta Daily CSI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuanta Daily CSI and Paradigm 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 Paradigm SP GSCI are associated (or correlated) with Yuanta Daily. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuanta Daily CSI has no effect on the direction of Paradigm i.e., Paradigm and Yuanta Daily go up and down completely randomly.

Pair Corralation between Paradigm and Yuanta Daily

Assuming the 90 days trading horizon Paradigm SP GSCI is expected to under-perform the Yuanta Daily. But the etf apears to be less risky and, when comparing its historical volatility, Paradigm SP GSCI is 1.34 times less risky than Yuanta Daily. The etf trades about -0.03 of its potential returns per unit of risk. The Yuanta Daily CSI is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,231  in Yuanta Daily CSI on September 3, 2024 and sell it today you would earn a total of  365.00  from holding Yuanta Daily CSI or generate 29.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Paradigm SP GSCI  vs.  Yuanta Daily CSI

Paradigm SP GSCI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Paradigm SP GSCI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Yuanta Daily CSI

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yuanta Daily CSI are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Yuanta Daily sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Paradigm and Yuanta Daily

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

The idea behind Paradigm SP GSCI and Yuanta Daily CSI 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.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.