Correlation Between CTBC Financial and ANJI Technology
Can any of the company-specific risk be diversified away by investing in both CTBC Financial and ANJI 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 CTBC Financial and ANJI Technology 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 ANJI Technology Co, you can compare the effects of market volatilities on CTBC Financial and ANJI 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 CTBC Financial with a short position of ANJI Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTBC Financial and ANJI Technology.
Diversification Opportunities for CTBC Financial and ANJI Technology
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CTBC and ANJI is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding CTBC Financial Holding and ANJI Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANJI Technology 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 ANJI Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANJI Technology has no effect on the direction of CTBC Financial i.e., CTBC Financial and ANJI Technology go up and down completely randomly.
Pair Corralation between CTBC Financial and ANJI Technology
Assuming the 90 days trading horizon CTBC Financial Holding is expected to generate 0.35 times more return on investment than ANJI Technology. However, CTBC Financial Holding is 2.9 times less risky than ANJI Technology. It trades about 0.22 of its potential returns per unit of risk. ANJI Technology Co is currently generating about -0.12 per unit of risk. If you would invest 3,585 in CTBC Financial Holding on August 30, 2024 and sell it today you would earn a total of 185.00 from holding CTBC Financial Holding or generate 5.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTBC Financial Holding vs. ANJI Technology Co
Performance |
| Timeline |
| CTBC Financial Holding |
| ANJI Technology |
CTBC Financial and ANJI Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTBC Financial and ANJI Technology
The main advantage of trading using opposite CTBC Financial and ANJI Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTBC Financial position performs unexpectedly, ANJI 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 ANJI Technology will offset losses from the drop in ANJI Technology's long position.| CTBC Financial vs. Taiwan Secom Co | CTBC Financial vs. TTET Union Corp | CTBC Financial vs. China Steel Chemical | CTBC Financial vs. Taiwan Shin Kong |
| ANJI Technology vs. TSEC Corp | ANJI Technology vs. United Renewable Energy | ANJI Technology vs. Tainergy Tech Co | ANJI Technology vs. Motech Industries Co |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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