Correlation Between YuantaP Shares and All Cosmos

Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and All Cosmos 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 All Cosmos 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 All Cosmos Bio Tech, you can compare the effects of market volatilities on YuantaP Shares and All Cosmos 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 All Cosmos. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and All Cosmos.

Diversification Opportunities for YuantaP Shares and All Cosmos

0.71

Correlation Coefficient

YuantaP Shares  All Cosmos

Poor diversification

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

Pair Corralation between YuantaP Shares and All Cosmos

Assuming the 90 days trading horizon YuantaP shares Taiwan Electronics is expected to under-perform the All Cosmos. In addition to that, YuantaP Shares is 1.42 times more volatile than All Cosmos Bio Tech. It trades about -0.05 of its total potential returns per unit of risk. All Cosmos Bio Tech is currently generating about 0.01 per unit of volatility. If you would invest  5,240  in All Cosmos Bio Tech on February 5, 2024 and sell it today you would earn a total of  0.00  from holding All Cosmos Bio Tech or generate 0.0% return on investment over 90 days.

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

YuantaP shares Taiwan Electron  vs.  All Cosmos Bio Tech

YuantaP shares Taiwan

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in YuantaP shares Taiwan Electronics are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, YuantaP Shares showed solid returns over the last few months and may actually be approaching a breakup point.

All Cosmos Bio

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in All Cosmos Bio Tech are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, All Cosmos 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 All Cosmos

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

The idea behind YuantaP shares Taiwan Electronics and All Cosmos Bio Tech 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..