Correlation Between Cathay Taiwan and Capital ICE
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By analyzing existing cross correlation between Cathay Taiwan 5G and Capital ICE International15, you can compare the effects of market volatilities on Cathay Taiwan and Capital ICE 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 ICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cathay Taiwan and Capital ICE.
Diversification Opportunities for Cathay Taiwan and Capital ICE
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cathay and Capital is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Cathay Taiwan 5G and Capital ICE International15 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital ICE Internat 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 ICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital ICE Internat has no effect on the direction of Cathay Taiwan i.e., Cathay Taiwan and Capital ICE go up and down completely randomly.
Pair Corralation between Cathay Taiwan and Capital ICE
Assuming the 90 days trading horizon Cathay Taiwan 5G is expected to generate 3.36 times more return on investment than Capital ICE. However, Cathay Taiwan is 3.36 times more volatile than Capital ICE International15. It trades about 0.12 of its potential returns per unit of risk. Capital ICE International15 is currently generating about 0.07 per unit of risk. If you would invest 1,618 in Cathay Taiwan 5G on September 5, 2024 and sell it today you would earn a total of 822.00 from holding Cathay Taiwan 5G or generate 50.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 97.53% |
| Values | Daily Returns |
Cathay Taiwan 5G vs. Capital ICE International15
Performance |
| Timeline |
| Cathay Taiwan 5G |
| Capital ICE Internat |
Cathay Taiwan and Capital ICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cathay Taiwan and Capital ICE
The main advantage of trading using opposite Cathay Taiwan and Capital ICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cathay Taiwan position performs unexpectedly, Capital ICE 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 ICE will offset losses from the drop in Capital ICE'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 ICE vs. Ruentex Development Co | Capital ICE vs. Symtek Automation Asia | Capital ICE vs. CTCI Corp | Capital ICE 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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