Correlation Between CTBC Financial and Topco Scientific
Can any of the company-specific risk be diversified away by investing in both CTBC Financial and Topco Scientific 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 Topco Scientific 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 Topco Scientific Co, you can compare the effects of market volatilities on CTBC Financial and Topco Scientific 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 Topco Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTBC Financial and Topco Scientific.
Diversification Opportunities for CTBC Financial and Topco Scientific
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CTBC and Topco is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding CTBC Financial Holding and Topco Scientific Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Topco Scientific 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 Topco Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Topco Scientific has no effect on the direction of CTBC Financial i.e., CTBC Financial and Topco Scientific go up and down completely randomly.
Pair Corralation between CTBC Financial and Topco Scientific
Assuming the 90 days trading horizon CTBC Financial Holding is expected to generate 0.79 times more return on investment than Topco Scientific. However, CTBC Financial Holding is 1.26 times less risky than Topco Scientific. It trades about 0.14 of its potential returns per unit of risk. Topco Scientific Co is currently generating about 0.0 per unit of risk. If you would invest 3,770 in CTBC Financial Holding on November 27, 2024 and sell it today you would earn a total of 270.00 from holding CTBC Financial Holding or generate 7.16% 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. Topco Scientific Co
Performance |
| Timeline |
| CTBC Financial Holding |
| Topco Scientific |
CTBC Financial and Topco Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTBC Financial and Topco Scientific
The main advantage of trading using opposite CTBC Financial and Topco Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTBC Financial position performs unexpectedly, Topco Scientific 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 Topco Scientific will offset losses from the drop in Topco Scientific'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 |
| Topco Scientific vs. RiTdisplay Corp | Topco Scientific vs. Thye Ming Industrial | Topco Scientific vs. I Jang Industrial | Topco Scientific vs. Yi Jinn Industrial |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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