Correlation Between Cathay Financial and Yeou Yih
Can any of the company-specific risk be diversified away by investing in both Cathay Financial and Yeou Yih 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 Yeou Yih 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 Yeou Yih Steel, you can compare the effects of market volatilities on Cathay Financial and Yeou Yih 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 Yeou Yih. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cathay Financial and Yeou Yih.
Diversification Opportunities for Cathay Financial and Yeou Yih
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cathay and Yeou is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Cathay Financial Holding and Yeou Yih Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yeou Yih Steel 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 Yeou Yih. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yeou Yih Steel has no effect on the direction of Cathay Financial i.e., Cathay Financial and Yeou Yih go up and down completely randomly.
Pair Corralation between Cathay Financial and Yeou Yih
Assuming the 90 days trading horizon Cathay Financial Holding is expected to generate 1.3 times more return on investment than Yeou Yih. However, Cathay Financial is 1.3 times more volatile than Yeou Yih Steel. It trades about 0.06 of its potential returns per unit of risk. Yeou Yih Steel is currently generating about -0.01 per unit of risk. If you would invest 6,750 in Cathay Financial Holding on September 13, 2024 and sell it today you would earn a total of 90.00 from holding Cathay Financial Holding or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cathay Financial Holding vs. Yeou Yih Steel
Performance |
| Timeline |
| Cathay Financial Holding |
| Yeou Yih Steel |
Cathay Financial and Yeou Yih Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cathay Financial and Yeou Yih
The main advantage of trading using opposite Cathay Financial and Yeou Yih positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cathay Financial position performs unexpectedly, Yeou Yih 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 Yeou Yih will offset losses from the drop in Yeou Yih'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 |
| Yeou Yih vs. BenQ Medical Technology | Yeou Yih vs. Cowealth Medical Holding | Yeou Yih vs. Jia Jie Biomedical | Yeou Yih vs. Taiwan Speciality Chemicals |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |