Correlation Between CTBC Financial and Taiwan Hopax
Can any of the company-specific risk be diversified away by investing in both CTBC Financial and Taiwan Hopax 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 Taiwan Hopax 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 Taiwan Hopax Chemsistry, you can compare the effects of market volatilities on CTBC Financial and Taiwan Hopax 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 Taiwan Hopax. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTBC Financial and Taiwan Hopax.
Diversification Opportunities for CTBC Financial and Taiwan Hopax
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CTBC and Taiwan is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding CTBC Financial Holding and Taiwan Hopax Chemsistry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Hopax Chemsistry 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 Taiwan Hopax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Hopax Chemsistry has no effect on the direction of CTBC Financial i.e., CTBC Financial and Taiwan Hopax go up and down completely randomly.
Pair Corralation between CTBC Financial and Taiwan Hopax
Assuming the 90 days trading horizon CTBC Financial Holding is expected to generate 0.89 times more return on investment than Taiwan Hopax. However, CTBC Financial Holding is 1.13 times less risky than Taiwan Hopax. It trades about 0.09 of its potential returns per unit of risk. Taiwan Hopax Chemsistry is currently generating about 0.01 per unit of risk. If you would invest 2,188 in CTBC Financial Holding on August 26, 2024 and sell it today you would earn a total of 1,587 from holding CTBC Financial Holding or generate 72.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
CTBC Financial Holding vs. Taiwan Hopax Chemsistry
Performance |
| Timeline |
| CTBC Financial Holding |
| Taiwan Hopax Chemsistry |
CTBC Financial and Taiwan Hopax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTBC Financial and Taiwan Hopax
The main advantage of trading using opposite CTBC Financial and Taiwan Hopax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTBC Financial position performs unexpectedly, Taiwan Hopax 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 Taiwan Hopax will offset losses from the drop in Taiwan Hopax'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 |
| Taiwan Hopax vs. Mechema Chemicals Int | Taiwan Hopax vs. Coremax Corp | Taiwan Hopax vs. China Steel Chemical | Taiwan Hopax vs. Wafer Works |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |