Correlation Between Yuanta Global and Yuanta 10

Can any of the company-specific risk be diversified away by investing in both Yuanta Global and Yuanta 10 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 Global and Yuanta 10 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Yuanta Global NexGen and Yuanta 10 Investment, you can compare the effects of market volatilities on Yuanta Global and Yuanta 10 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 Global with a short position of Yuanta 10. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanta Global and Yuanta 10.

Diversification Opportunities for Yuanta Global and Yuanta 10

-0.07

Correlation Coefficient

Yuanta Global  Yuanta 10

Good diversification

The 3 months correlation between Yuanta and Yuanta is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta Global NexGen and Yuanta 10 Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuanta 10 Investment and Yuanta Global 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 Global NexGen are associated (or correlated) with Yuanta 10. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuanta 10 Investment has no effect on the direction of Yuanta Global i.e., Yuanta Global and Yuanta 10 go up and down completely randomly.

Pair Corralation between Yuanta Global and Yuanta 10

Assuming the 90 days trading horizon Yuanta Global NexGen is expected to generate 1.92 times more return on investment than Yuanta 10. However, Yuanta Global is 1.92 times more volatile than Yuanta 10 Investment. It trades about 0.05 of its potential returns per unit of risk. Yuanta 10 Investment is currently generating about -0.04 per unit of risk. If you would invest  3,663  in Yuanta Global NexGen on September 14, 2024 and sell it today you would earn a total of  121.00  from holding Yuanta Global NexGen or generate 3.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Yuanta Global NexGen  vs.  Yuanta 10 Investment

Yuanta Global NexGen

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Yuanta Global NexGen are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Yuanta Global is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Yuanta 10 Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yuanta 10 Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Yuanta 10 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Yuanta Global and Yuanta 10

The main advantage of trading using opposite Yuanta Global and Yuanta 10 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuanta Global position performs unexpectedly, Yuanta 10 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 10 will offset losses from the drop in Yuanta 10's long position.

The idea behind Yuanta Global NexGen and Yuanta 10 Investment 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.