Correlation Between YuantaP Shares and Top Bright

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

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

Diversification Opportunities for YuantaP Shares and Top Bright

0.0

Correlation Coefficient

YuantaP Shares  Top Bright

Pay attention - limited upside

The 3 months correlation between YuantaP and Top is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Top and Top Bright Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top Bright Holding 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 Top are associated (or correlated) with Top Bright. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top Bright Holding has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Top Bright go up and down completely randomly.

Pair Corralation between YuantaP Shares and Top Bright

If you would invest  16,720  in YuantaP shares Taiwan Top on March 21, 2024 and sell it today you would earn a total of  2,075  from holding YuantaP shares Taiwan Top or generate 12.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

YuantaP shares Taiwan Top  vs.  Top Bright Holding

YuantaP shares Taiwan

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in YuantaP shares Taiwan Top are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, YuantaP Shares showed solid returns over the last few months and may actually be approaching a breakup point.

Top Bright Holding

Risk-Adjusted Performance

0 of 100

OK

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

Pair Trading with YuantaP Shares and Top Bright

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

The idea behind YuantaP shares Taiwan Top and Top Bright Holding 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.