Correlation Between Amulaire Thermal and Cathay Financial
Can any of the company-specific risk be diversified away by investing in both Amulaire Thermal and Cathay 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 Amulaire Thermal and Cathay Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amulaire Thermal Technology and Cathay Financial Holding, you can compare the effects of market volatilities on Amulaire Thermal and Cathay 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 Amulaire Thermal with a short position of Cathay Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amulaire Thermal and Cathay Financial.
Diversification Opportunities for Amulaire Thermal and Cathay Financial
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amulaire and Cathay is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Amulaire Thermal Technology and Cathay Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathay Financial Holding and Amulaire Thermal 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 Amulaire Thermal Technology are associated (or correlated) with Cathay Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathay Financial Holding has no effect on the direction of Amulaire Thermal i.e., Amulaire Thermal and Cathay Financial go up and down completely randomly.
Pair Corralation between Amulaire Thermal and Cathay Financial
Assuming the 90 days trading horizon Amulaire Thermal Technology is expected to generate 22.77 times more return on investment than Cathay Financial. However, Amulaire Thermal is 22.77 times more volatile than Cathay Financial Holding. It trades about 0.11 of its potential returns per unit of risk. Cathay Financial Holding is currently generating about -0.06 per unit of risk. If you would invest 2,810 in Amulaire Thermal Technology on October 30, 2024 and sell it today you would earn a total of 165.00 from holding Amulaire Thermal Technology or generate 5.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amulaire Thermal Technology vs. Cathay Financial Holding
Performance |
| Timeline |
| Amulaire Thermal Tec |
| Cathay Financial Holding |
Amulaire Thermal and Cathay Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amulaire Thermal and Cathay Financial
The main advantage of trading using opposite Amulaire Thermal and Cathay Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amulaire Thermal position performs unexpectedly, Cathay 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 Cathay Financial will offset losses from the drop in Cathay Financial's long position.| Amulaire Thermal vs. E Lead Electronic Co | Amulaire Thermal vs. Jentech Precision Industrial | Amulaire Thermal vs. Yusin Holding Corp | Amulaire Thermal vs. Laster Tech Corp |
| Cathay Financial vs. Holiday Entertainment Co | Cathay Financial vs. AVerMedia Technologies | Cathay Financial vs. Sports Gear Co | Cathay Financial vs. Asmedia Technology |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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