Correlation Between CTBC Financial and Microbio
Can any of the company-specific risk be diversified away by investing in both CTBC Financial and Microbio 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 Microbio 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 Microbio Co, you can compare the effects of market volatilities on CTBC Financial and Microbio 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 Microbio. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTBC Financial and Microbio.
Diversification Opportunities for CTBC Financial and Microbio
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CTBC and Microbio is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding CTBC Financial Holding and Microbio Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microbio 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 Microbio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microbio has no effect on the direction of CTBC Financial i.e., CTBC Financial and Microbio go up and down completely randomly.
Pair Corralation between CTBC Financial and Microbio
Assuming the 90 days trading horizon CTBC Financial Holding is expected to generate 0.07 times more return on investment than Microbio. However, CTBC Financial Holding is 14.87 times less risky than Microbio. It trades about 0.38 of its potential returns per unit of risk. Microbio Co is currently generating about -0.14 per unit of risk. If you would invest 6,070 in CTBC Financial Holding on October 26, 2024 and sell it today you would earn a total of 210.00 from holding CTBC Financial Holding or generate 3.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTBC Financial Holding vs. Microbio Co
Performance |
| Timeline |
| CTBC Financial Holding |
| Microbio |
CTBC Financial and Microbio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTBC Financial and Microbio
The main advantage of trading using opposite CTBC Financial and Microbio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTBC Financial position performs unexpectedly, Microbio 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 Microbio will offset losses from the drop in Microbio's long position.| CTBC Financial vs. Da Cin Construction Co | CTBC Financial vs. New Asia Construction | CTBC Financial vs. Tainet Communication System | CTBC Financial vs. Ruentex Engineering Construction |
| Microbio vs. Synmosa Biopharma | Microbio vs. Sinphar Pharmaceutical Co | Microbio vs. Taigen Biopharmaceuticals Holdings | Microbio vs. Abnova Taiwan Corp |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| 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 | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |