Correlation Between CTBC Financial and First Copper
Can any of the company-specific risk be diversified away by investing in both CTBC Financial and First Copper 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 First Copper 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 First Copper Technology, you can compare the effects of market volatilities on CTBC Financial and First Copper 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 First Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTBC Financial and First Copper.
Diversification Opportunities for CTBC Financial and First Copper
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CTBC and First is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding CTBC Financial Holding and First Copper Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Copper 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 First Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Copper Technology has no effect on the direction of CTBC Financial i.e., CTBC Financial and First Copper go up and down completely randomly.
Pair Corralation between CTBC Financial and First Copper
Assuming the 90 days trading horizon CTBC Financial is expected to generate 14.16 times less return on investment than First Copper. But when comparing it to its historical volatility, CTBC Financial Holding is 20.87 times less risky than First Copper. It trades about 0.1 of its potential returns per unit of risk. First Copper Technology is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 4,085 in First Copper Technology on August 28, 2024 and sell it today you would earn a total of 85.00 from holding First Copper Technology or generate 2.08% 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. First Copper Technology
Performance |
| Timeline |
| CTBC Financial Holding |
| First Copper Technology |
CTBC Financial and First Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTBC Financial and First Copper
The main advantage of trading using opposite CTBC Financial and First Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTBC Financial position performs unexpectedly, First Copper 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 First Copper will offset losses from the drop in First Copper's long position.| CTBC Financial vs. First Copper Technology | CTBC Financial vs. U Media Communications | CTBC Financial vs. C Media Electronics | CTBC Financial vs. Sunspring Metal Corp |
| First Copper vs. Chung Hung Steel | First Copper vs. Ta Chen Stainless | First Copper vs. Tung Ho Steel | First Copper vs. Yieh Phui Enterprise |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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