Correlation Between Cathay Taiwan and Capital BofA
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By analyzing existing cross correlation between Cathay Taiwan 5G and Capital BofA Merrill, you can compare the effects of market volatilities on Cathay Taiwan and Capital BofA 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 Taiwan with a short position of Capital BofA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cathay Taiwan and Capital BofA.
Diversification Opportunities for Cathay Taiwan and Capital BofA
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cathay and Capital is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Cathay Taiwan 5G and Capital BofA Merrill in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital BofA Merrill and Cathay Taiwan 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 Taiwan 5G are associated (or correlated) with Capital BofA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital BofA Merrill has no effect on the direction of Cathay Taiwan i.e., Cathay Taiwan and Capital BofA go up and down completely randomly.
Pair Corralation between Cathay Taiwan and Capital BofA
Assuming the 90 days trading horizon Cathay Taiwan 5G is expected to under-perform the Capital BofA. In addition to that, Cathay Taiwan is 1.96 times more volatile than Capital BofA Merrill. It trades about -0.02 of its total potential returns per unit of risk. Capital BofA Merrill is currently generating about 0.41 per unit of volatility. If you would invest 3,808 in Capital BofA Merrill on September 5, 2024 and sell it today you would earn a total of 214.00 from holding Capital BofA Merrill or generate 5.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Cathay Taiwan 5G vs. Capital BofA Merrill
Performance |
| Timeline |
| Cathay Taiwan 5G |
| Capital BofA Merrill |
Cathay Taiwan and Capital BofA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cathay Taiwan and Capital BofA
The main advantage of trading using opposite Cathay Taiwan and Capital BofA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cathay Taiwan position performs unexpectedly, Capital BofA 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 Capital BofA will offset losses from the drop in Capital BofA's long position.| Cathay Taiwan vs. Ruentex Development Co | Cathay Taiwan vs. Symtek Automation Asia | Cathay Taiwan vs. CTCI Corp | Cathay Taiwan vs. Information Technology Total |
| Capital BofA vs. Ruentex Development Co | Capital BofA vs. Symtek Automation Asia | Capital BofA vs. CTCI Corp | Capital BofA vs. Information Technology Total |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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