Correlation Between CTBC Financial and ESUN Financial
Can any of the company-specific risk be diversified away by investing in both CTBC Financial and ESUN 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 CTBC Financial and ESUN Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTBC Financial Holding and ESUN Financial Holding, you can compare the effects of market volatilities on CTBC Financial and ESUN 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 CTBC Financial with a short position of ESUN Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTBC Financial and ESUN Financial.
Diversification Opportunities for CTBC Financial and ESUN Financial
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CTBC and ESUN is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding CTBC Financial Holding and ESUN Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESUN Financial Holding and CTBC 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 CTBC Financial Holding are associated (or correlated) with ESUN Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESUN Financial Holding has no effect on the direction of CTBC Financial i.e., CTBC Financial and ESUN Financial go up and down completely randomly.
Pair Corralation between CTBC Financial and ESUN Financial
Assuming the 90 days trading horizon CTBC Financial Holding is expected to generate 1.02 times more return on investment than ESUN Financial. However, CTBC Financial is 1.02 times more volatile than ESUN Financial Holding. It trades about 0.2 of its potential returns per unit of risk. ESUN Financial Holding is currently generating about 0.06 per unit of risk. If you would invest 3,590 in CTBC Financial Holding on August 28, 2024 and sell it today you would earn a total of 145.00 from holding CTBC Financial Holding or generate 4.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTBC Financial Holding vs. ESUN Financial Holding
Performance |
| Timeline |
| CTBC Financial Holding |
| ESUN Financial Holding |
CTBC Financial and ESUN Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTBC Financial and ESUN Financial
The main advantage of trading using opposite CTBC Financial and ESUN Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTBC Financial position performs unexpectedly, ESUN 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 ESUN Financial will offset losses from the drop in ESUN Financial's long position.| CTBC Financial vs. Fubon Financial Holding | CTBC Financial vs. Cathay Financial Holding | CTBC Financial vs. Mega Financial Holding | CTBC Financial vs. First Financial Holding |
| ESUN Financial vs. Mega Financial Holding | ESUN Financial vs. CTBC Financial Holding | ESUN Financial vs. First Financial Holding | ESUN Financial vs. Fubon Financial Holding |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |