Correlation Between CTBC USD and Yuanta Daily
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By analyzing existing cross correlation between CTBC USD Corporate and Yuanta Daily Taiwan, you can compare the effects of market volatilities on CTBC USD and Yuanta Daily 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 CTBC USD with a short position of Yuanta Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTBC USD and Yuanta Daily.
Diversification Opportunities for CTBC USD and Yuanta Daily
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CTBC and Yuanta is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding CTBC USD Corporate and Yuanta Daily Taiwan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuanta Daily Taiwan and CTBC USD 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 CTBC USD Corporate are associated (or correlated) with Yuanta Daily. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuanta Daily Taiwan has no effect on the direction of CTBC USD i.e., CTBC USD and Yuanta Daily go up and down completely randomly.
Pair Corralation between CTBC USD and Yuanta Daily
Assuming the 90 days trading horizon CTBC USD Corporate is expected to generate 0.32 times more return on investment than Yuanta Daily. However, CTBC USD Corporate is 3.17 times less risky than Yuanta Daily. It trades about 0.07 of its potential returns per unit of risk. Yuanta Daily Taiwan is currently generating about -0.04 per unit of risk. If you would invest 3,479 in CTBC USD Corporate on September 2, 2024 and sell it today you would earn a total of 161.00 from holding CTBC USD Corporate or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTBC USD Corporate vs. Yuanta Daily Taiwan
Performance |
| Timeline |
| CTBC USD Corporate |
| Yuanta Daily Taiwan |
CTBC USD and Yuanta Daily Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTBC USD and Yuanta Daily
The main advantage of trading using opposite CTBC USD and Yuanta Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTBC USD position performs unexpectedly, Yuanta Daily 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 Daily will offset losses from the drop in Yuanta Daily's long position.The idea behind CTBC USD Corporate and Yuanta Daily Taiwan 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.| Yuanta Daily vs. Yuanta Daily CSI | Yuanta Daily vs. Fubon FTSE Vietnam | Yuanta Daily vs. Paradigm SP GSCI |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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