Correlation Between Sunspring Metal and CTBC Financial
Can any of the company-specific risk be diversified away by investing in both Sunspring Metal and CTBC Financial 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 Sunspring Metal and CTBC Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunspring Metal Corp and CTBC Financial Holding, you can compare the effects of market volatilities on Sunspring Metal and CTBC Financial 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 Sunspring Metal with a short position of CTBC Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunspring Metal and CTBC Financial.
Diversification Opportunities for Sunspring Metal and CTBC Financial
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sunspring and CTBC is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sunspring Metal Corp and CTBC Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTBC Financial Holding and Sunspring Metal 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 Sunspring Metal Corp are associated (or correlated) with CTBC Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTBC Financial Holding has no effect on the direction of Sunspring Metal i.e., Sunspring Metal and CTBC Financial go up and down completely randomly.
Pair Corralation between Sunspring Metal and CTBC Financial
Assuming the 90 days trading horizon Sunspring Metal Corp is expected to under-perform the CTBC Financial. In addition to that, Sunspring Metal is 34.82 times more volatile than CTBC Financial Holding. It trades about -0.18 of its total potential returns per unit of risk. CTBC Financial Holding is currently generating about 0.1 per unit of volatility. If you would invest 6,070 in CTBC Financial Holding on August 28, 2024 and sell it today you would earn a total of 10.00 from holding CTBC Financial Holding or generate 0.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunspring Metal Corp vs. CTBC Financial Holding
Performance |
| Timeline |
| Sunspring Metal Corp |
| CTBC Financial Holding |
Sunspring Metal and CTBC Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunspring Metal and CTBC Financial
The main advantage of trading using opposite Sunspring Metal and CTBC Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunspring Metal position performs unexpectedly, CTBC Financial 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 CTBC Financial will offset losses from the drop in CTBC Financial's long position.| Sunspring Metal vs. Sunny Friend Environmental | Sunspring Metal vs. TTET Union Corp | Sunspring Metal vs. ECOVE Environment Corp | Sunspring Metal vs. Yulon Finance Corp |
| CTBC Financial vs. First Copper Technology | CTBC Financial vs. U Media Communications | CTBC Financial vs. C Media Electronics | CTBC Financial vs. Sunspring Metal Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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