Correlation Between CTBC Financial and Wha Yu
Can any of the company-specific risk be diversified away by investing in both CTBC Financial and Wha Yu 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 Wha Yu 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 Wha Yu Industrial, you can compare the effects of market volatilities on CTBC Financial and Wha Yu 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 Wha Yu. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTBC Financial and Wha Yu.
Diversification Opportunities for CTBC Financial and Wha Yu
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CTBC and Wha is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding CTBC Financial Holding and Wha Yu Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wha Yu Industrial 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 Wha Yu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wha Yu Industrial has no effect on the direction of CTBC Financial i.e., CTBC Financial and Wha Yu go up and down completely randomly.
Pair Corralation between CTBC Financial and Wha Yu
Assuming the 90 days trading horizon CTBC Financial is expected to generate 3.85 times less return on investment than Wha Yu. But when comparing it to its historical volatility, CTBC Financial Holding is 3.08 times less risky than Wha Yu. It trades about 0.18 of its potential returns per unit of risk. Wha Yu Industrial is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,660 in Wha Yu Industrial on September 1, 2024 and sell it today you would earn a total of 270.00 from holding Wha Yu Industrial or generate 16.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTBC Financial Holding vs. Wha Yu Industrial
Performance |
| Timeline |
| CTBC Financial Holding |
| Wha Yu Industrial |
CTBC Financial and Wha Yu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTBC Financial and Wha Yu
The main advantage of trading using opposite CTBC Financial and Wha Yu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTBC Financial position performs unexpectedly, Wha Yu 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 Wha Yu will offset losses from the drop in Wha Yu's long position.| CTBC Financial vs. Central Reinsurance Corp | CTBC Financial vs. Huaku Development Co | CTBC Financial vs. Fubon Financial Holding |
| Wha Yu vs. Gemtek Technology Co | Wha Yu vs. Arcadyan Technology Corp | Wha Yu vs. Zinwell | Wha Yu vs. Silitech Technology Corp |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |