Correlation Between YuantaP Shares and Macronix International

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

By analyzing existing cross correlation between YuantaP shares Taiwan Mid Cap and Macronix International Co, you can compare the effects of market volatilities on YuantaP Shares and Macronix International 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 Macronix International. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Macronix International.

Diversification Opportunities for YuantaP Shares and Macronix International

-0.71

Correlation Coefficient

YuantaP Shares  Macronix International

Pay attention - limited upside

The 3 months correlation between YuantaP and Macronix is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Mid Cap and Macronix International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macronix International 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 Mid Cap are associated (or correlated) with Macronix International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macronix International has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Macronix International go up and down completely randomly.

Pair Corralation between YuantaP Shares and Macronix International

Assuming the 90 days trading horizon YuantaP shares Taiwan Mid Cap is expected to generate 0.77 times more return on investment than Macronix International. However, YuantaP shares Taiwan Mid Cap is 1.29 times less risky than Macronix International. It trades about 0.0 of its potential returns per unit of risk. Macronix International Co is currently generating about -0.09 per unit of risk. If you would invest  7,915  in YuantaP shares Taiwan Mid Cap on February 7, 2024 and sell it today you would lose (15.00) from holding YuantaP shares Taiwan Mid Cap or give up 0.19% of portfolio value over 90 days.

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

YuantaP shares Taiwan Mid Cap  vs.  Macronix International Co

YuantaP shares Taiwan

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in YuantaP shares Taiwan Mid Cap are ranked lower than 8 (%) 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 June 2024.

Macronix International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Macronix International Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Macronix International is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with YuantaP Shares and Macronix International

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

The idea behind YuantaP shares Taiwan Mid Cap and Macronix International Co 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.