Correlation Between Cathay TAIEX and CTBC Emerging
Specify exactly 2 symbols:
By analyzing existing cross correlation between Cathay TAIEX Daily and CTBC Emerging Asia, you can compare the effects of market volatilities on Cathay TAIEX and CTBC Emerging 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 Cathay TAIEX with a short position of CTBC Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cathay TAIEX and CTBC Emerging.
Diversification Opportunities for Cathay TAIEX and CTBC Emerging
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cathay and CTBC is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Cathay TAIEX Daily and CTBC Emerging Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTBC Emerging Asia and Cathay TAIEX 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 Cathay TAIEX Daily are associated (or correlated) with CTBC Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTBC Emerging Asia has no effect on the direction of Cathay TAIEX i.e., Cathay TAIEX and CTBC Emerging go up and down completely randomly.
Pair Corralation between Cathay TAIEX and CTBC Emerging
Assuming the 90 days trading horizon Cathay TAIEX Daily is expected to under-perform the CTBC Emerging. In addition to that, Cathay TAIEX is 2.53 times more volatile than CTBC Emerging Asia. It trades about -0.09 of its total potential returns per unit of risk. CTBC Emerging Asia is currently generating about 0.03 per unit of volatility. If you would invest 3,361 in CTBC Emerging Asia on September 3, 2024 and sell it today you would earn a total of 242.00 from holding CTBC Emerging Asia or generate 7.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cathay TAIEX Daily vs. CTBC Emerging Asia
Performance |
| Timeline |
| Cathay TAIEX Daily |
| CTBC Emerging Asia |
Cathay TAIEX and CTBC Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cathay TAIEX and CTBC Emerging
The main advantage of trading using opposite Cathay TAIEX and CTBC Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cathay TAIEX position performs unexpectedly, CTBC Emerging 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 CTBC Emerging will offset losses from the drop in CTBC Emerging's long position.| Cathay TAIEX vs. Cathay Taiwan 5G | Cathay TAIEX vs. Ruentex Development Co | Cathay TAIEX vs. Symtek Automation Asia | Cathay TAIEX vs. CTCI Corp |
| CTBC Emerging vs. CTBC USD Corporate | CTBC Emerging vs. CTBC 20 Year | CTBC Emerging vs. CTBC TIP Customized | CTBC Emerging vs. CTBC Treasury 20 |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |