Correlation Between CTBC Financial and Launch Technologies
Can any of the company-specific risk be diversified away by investing in both CTBC Financial and Launch Technologies 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 Launch Technologies 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 Launch Technologies Co, you can compare the effects of market volatilities on CTBC Financial and Launch Technologies 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 Launch Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTBC Financial and Launch Technologies.
Diversification Opportunities for CTBC Financial and Launch Technologies
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CTBC and Launch is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding CTBC Financial Holding and Launch Technologies Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Launch Technologies 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 Launch Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Launch Technologies has no effect on the direction of CTBC Financial i.e., CTBC Financial and Launch Technologies go up and down completely randomly.
Pair Corralation between CTBC Financial and Launch Technologies
Assuming the 90 days trading horizon CTBC Financial Holding is expected to generate 1.16 times more return on investment than Launch Technologies. However, CTBC Financial is 1.16 times more volatile than Launch Technologies Co. It trades about 0.02 of its potential returns per unit of risk. Launch Technologies Co is currently generating about -0.06 per unit of risk. If you would invest 3,640 in CTBC Financial Holding on September 1, 2024 and sell it today you would earn a total of 100.00 from holding CTBC Financial Holding or generate 2.75% 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. Launch Technologies Co
Performance |
| Timeline |
| CTBC Financial Holding |
| Launch Technologies |
CTBC Financial and Launch Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTBC Financial and Launch Technologies
The main advantage of trading using opposite CTBC Financial and Launch Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTBC Financial position performs unexpectedly, Launch Technologies 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 Launch Technologies will offset losses from the drop in Launch Technologies' long position.| CTBC Financial vs. Central Reinsurance Corp | CTBC Financial vs. Huaku Development Co | CTBC Financial vs. Fubon Financial Holding |
| Launch Technologies vs. An Shin Food Services | Launch Technologies vs. United Radiant Technology | Launch Technologies vs. Microtips Technology | Launch Technologies vs. Voltronic Power Technology |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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