Correlation Between Shan Loong and CTBC Financial
Can any of the company-specific risk be diversified away by investing in both Shan Loong 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 Shan Loong and CTBC Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shan Loong Transportation Co and CTBC Financial Holding, you can compare the effects of market volatilities on Shan Loong 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 Shan Loong with a short position of CTBC Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shan Loong and CTBC Financial.
Diversification Opportunities for Shan Loong and CTBC Financial
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shan and CTBC is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Shan Loong Transportation Co 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 Shan Loong 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 Shan Loong Transportation Co 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 Shan Loong i.e., Shan Loong and CTBC Financial go up and down completely randomly.
Pair Corralation between Shan Loong and CTBC Financial
Assuming the 90 days trading horizon Shan Loong Transportation Co is expected to under-perform the CTBC Financial. In addition to that, Shan Loong is 5.37 times more volatile than CTBC Financial Holding. It trades about -0.14 of its total potential returns per unit of risk. CTBC Financial Holding is currently generating about 0.05 per unit of volatility. If you would invest 5,750 in CTBC Financial Holding on October 26, 2024 and sell it today you would earn a total of 90.00 from holding CTBC Financial Holding or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shan Loong Transportation Co vs. CTBC Financial Holding
Performance |
| Timeline |
| Shan Loong Transport |
| CTBC Financial Holding |
Shan Loong and CTBC Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shan Loong and CTBC Financial
The main advantage of trading using opposite Shan Loong and CTBC Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shan Loong 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.| Shan Loong vs. Kerry TJ Logistics | Shan Loong vs. China Container Terminal | Shan Loong vs. Eastern Media International | Shan Loong vs. Taiwan Navigation Co |
| CTBC Financial vs. Wei Chih Steel | CTBC Financial vs. Quintain Steel Co | CTBC Financial vs. Shan Loong Transportation Co | CTBC Financial vs. Amulaire Thermal 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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