Correlation Between Cathay Financial and Xxentria Technology
Can any of the company-specific risk be diversified away by investing in both Cathay Financial and Xxentria Technology 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 Xxentria Technology 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 Xxentria Technology Materials, you can compare the effects of market volatilities on Cathay Financial and Xxentria Technology 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 Xxentria Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cathay Financial and Xxentria Technology.
Diversification Opportunities for Cathay Financial and Xxentria Technology
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cathay and Xxentria is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Cathay Financial Holding and Xxentria Technology Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xxentria Technology 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 Xxentria Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xxentria Technology has no effect on the direction of Cathay Financial i.e., Cathay Financial and Xxentria Technology go up and down completely randomly.
Pair Corralation between Cathay Financial and Xxentria Technology
Assuming the 90 days trading horizon Cathay Financial is expected to generate 16.4 times less return on investment than Xxentria Technology. But when comparing it to its historical volatility, Cathay Financial Holding is 18.59 times less risky than Xxentria Technology. It trades about 0.22 of its potential returns per unit of risk. Xxentria Technology Materials is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 5,340 in Xxentria Technology Materials on October 26, 2024 and sell it today you would earn a total of 290.00 from holding Xxentria Technology Materials or generate 5.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cathay Financial Holding vs. Xxentria Technology Materials
Performance |
| Timeline |
| Cathay Financial Holding |
| Xxentria Technology |
Cathay Financial and Xxentria Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cathay Financial and Xxentria Technology
The main advantage of trading using opposite Cathay Financial and Xxentria Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cathay Financial position performs unexpectedly, Xxentria Technology 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 Xxentria Technology will offset losses from the drop in Xxentria Technology's long position.| Cathay Financial vs. Quanta Storage | Cathay Financial vs. Adata Technology Co | Cathay Financial vs. Tong Hwa Synthetic Fiber | Cathay Financial vs. Johnson Chemical Pharmaceutical |
| Xxentria Technology vs. Hota Industrial Mfg | Xxentria Technology vs. Poya International Co | Xxentria Technology vs. Macauto Industrial Co | Xxentria Technology vs. Actron 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |