Correlation Between Cathay Sustainability and Yuanta Securities
Can any of the company-specific risk be diversified away by investing in both Cathay Sustainability and Yuanta Securities 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 Cathay Sustainability and Yuanta Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cathay Sustainability High and Yuanta Securities Investment, you can compare the effects of market volatilities on Cathay Sustainability and Yuanta Securities 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 Sustainability with a short position of Yuanta Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cathay Sustainability and Yuanta Securities.
Diversification Opportunities for Cathay Sustainability and Yuanta Securities
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cathay and Yuanta is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Cathay Sustainability High and Yuanta Securities Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuanta Securities and Cathay Sustainability 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 Sustainability High are associated (or correlated) with Yuanta Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuanta Securities has no effect on the direction of Cathay Sustainability i.e., Cathay Sustainability and Yuanta Securities go up and down completely randomly.
Pair Corralation between Cathay Sustainability and Yuanta Securities
Assuming the 90 days trading horizon Cathay Sustainability High is expected to generate 0.53 times more return on investment than Yuanta Securities. However, Cathay Sustainability High is 1.88 times less risky than Yuanta Securities. It trades about 0.1 of its potential returns per unit of risk. Yuanta Securities Investment is currently generating about -0.01 per unit of risk. If you would invest 1,430 in Cathay Sustainability High on August 31, 2024 and sell it today you would earn a total of 744.00 from holding Cathay Sustainability High or generate 52.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
Cathay Sustainability High vs. Yuanta Securities Investment
Performance |
| Timeline |
| Cathay Sustainability |
| Yuanta Securities |
Cathay Sustainability and Yuanta Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cathay Sustainability and Yuanta Securities
The main advantage of trading using opposite Cathay Sustainability and Yuanta Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cathay Sustainability position performs unexpectedly, Yuanta Securities 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 Securities will offset losses from the drop in Yuanta Securities' long position.| Cathay Sustainability vs. Yuanta Daily Taiwan | Cathay Sustainability vs. Cathay Taiwan 5G | Cathay Sustainability vs. Yuanta Daily CSI | Cathay Sustainability vs. Fubon FTSE Vietnam |
| Yuanta Securities vs. Yuanta Daily SP | Yuanta Securities vs. Yuanta SP GSCI | Yuanta Securities vs. Yuanta Global NexGen | Yuanta Securities vs. Yuanta 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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