Correlation Between Cathay Consolidated and Singtex Industrial
Can any of the company-specific risk be diversified away by investing in both Cathay Consolidated and Singtex Industrial 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 Consolidated and Singtex Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cathay Consolidated and Singtex Industrial Co, you can compare the effects of market volatilities on Cathay Consolidated and Singtex Industrial 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 Consolidated with a short position of Singtex Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cathay Consolidated and Singtex Industrial.
Diversification Opportunities for Cathay Consolidated and Singtex Industrial
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cathay and Singtex is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Cathay Consolidated and Singtex Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singtex Industrial and Cathay Consolidated 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 Consolidated are associated (or correlated) with Singtex Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singtex Industrial has no effect on the direction of Cathay Consolidated i.e., Cathay Consolidated and Singtex Industrial go up and down completely randomly.
Pair Corralation between Cathay Consolidated and Singtex Industrial
Assuming the 90 days trading horizon Cathay Consolidated is expected to generate 2.76 times more return on investment than Singtex Industrial. However, Cathay Consolidated is 2.76 times more volatile than Singtex Industrial Co. It trades about 0.18 of its potential returns per unit of risk. Singtex Industrial Co is currently generating about -0.2 per unit of risk. If you would invest 9,850 in Cathay Consolidated on September 14, 2024 and sell it today you would earn a total of 700.00 from holding Cathay Consolidated or generate 7.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cathay Consolidated vs. Singtex Industrial Co
Performance |
| Timeline |
| Cathay Consolidated |
| Singtex Industrial |
Cathay Consolidated and Singtex Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cathay Consolidated and Singtex Industrial
The main advantage of trading using opposite Cathay Consolidated and Singtex Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cathay Consolidated position performs unexpectedly, Singtex Industrial 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 Singtex Industrial will offset losses from the drop in Singtex Industrial's long position.| Cathay Consolidated vs. Eclat Textile Co | Cathay Consolidated vs. Ruentex Industries | Cathay Consolidated vs. Shinkong Synthetic Fiber | Cathay Consolidated vs. Taiwan Paiho |
| Singtex Industrial vs. Eclat Textile Co | Singtex Industrial vs. Ruentex Industries | Singtex Industrial vs. Shinkong Synthetic Fiber | Singtex Industrial vs. Taiwan Paiho |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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