Correlation Between Cathay Financial and Silergy Corp
Can any of the company-specific risk be diversified away by investing in both Cathay Financial and Silergy Corp 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 Financial and Silergy Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cathay Financial Holding and Silergy Corp, you can compare the effects of market volatilities on Cathay Financial and Silergy Corp 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 Financial with a short position of Silergy Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cathay Financial and Silergy Corp.
Diversification Opportunities for Cathay Financial and Silergy Corp
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cathay and Silergy is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Cathay Financial Holding and Silergy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silergy Corp and Cathay Financial 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 Financial Holding are associated (or correlated) with Silergy Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silergy Corp has no effect on the direction of Cathay Financial i.e., Cathay Financial and Silergy Corp go up and down completely randomly.
Pair Corralation between Cathay Financial and Silergy Corp
Assuming the 90 days trading horizon Cathay Financial Holding is expected to generate 0.38 times more return on investment than Silergy Corp. However, Cathay Financial Holding is 2.63 times less risky than Silergy Corp. It trades about -0.15 of its potential returns per unit of risk. Silergy Corp is currently generating about -0.35 per unit of risk. If you would invest 6,930 in Cathay Financial Holding on August 28, 2024 and sell it today you would lose (200.00) from holding Cathay Financial Holding or give up 2.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Cathay Financial Holding vs. Silergy Corp
Performance |
| Timeline |
| Cathay Financial Holding |
| Silergy Corp |
Cathay Financial and Silergy Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cathay Financial and Silergy Corp
The main advantage of trading using opposite Cathay Financial and Silergy Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cathay Financial position performs unexpectedly, Silergy Corp 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 Silergy Corp will offset losses from the drop in Silergy Corp's long position.| Cathay Financial vs. Fubon Financial Holding | Cathay Financial vs. CTBC Financial Holding | Cathay Financial vs. Mega Financial Holding | Cathay Financial vs. First Financial Holding |
| Silergy Corp vs. Novatek Microelectronics Corp | Silergy Corp vs. Realtek Semiconductor Corp | Silergy Corp vs. Aspeed Technology | Silergy Corp vs. Alchip Technologies |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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