Correlation Between CTBC Financial and San Fu
Can any of the company-specific risk be diversified away by investing in both CTBC Financial and San Fu 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 San Fu 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 San Fu Chemical, you can compare the effects of market volatilities on CTBC Financial and San Fu 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 San Fu. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTBC Financial and San Fu.
Diversification Opportunities for CTBC Financial and San Fu
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CTBC and San is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding CTBC Financial Holding and San Fu Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on San Fu Chemical 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 San Fu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of San Fu Chemical has no effect on the direction of CTBC Financial i.e., CTBC Financial and San Fu go up and down completely randomly.
Pair Corralation between CTBC Financial and San Fu
Assuming the 90 days trading horizon CTBC Financial Holding is expected to generate 0.15 times more return on investment than San Fu. However, CTBC Financial Holding is 6.53 times less risky than San Fu. It trades about 0.04 of its potential returns per unit of risk. San Fu Chemical is currently generating about -0.01 per unit of risk. If you would invest 5,850 in CTBC Financial Holding on August 28, 2024 and sell it today you would earn a total of 230.00 from holding CTBC Financial Holding or generate 3.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.71% |
| Values | Daily Returns |
CTBC Financial Holding vs. San Fu Chemical
Performance |
| Timeline |
| CTBC Financial Holding |
| San Fu Chemical |
CTBC Financial and San Fu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTBC Financial and San Fu
The main advantage of trading using opposite CTBC Financial and San Fu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTBC Financial position performs unexpectedly, San Fu 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 San Fu will offset losses from the drop in San Fu's long position.| CTBC Financial vs. WiseChip Semiconductor | CTBC Financial vs. Elite Semiconductor Memory | CTBC Financial vs. EnTie Commercial Bank | CTBC Financial vs. Advanced Wireless Semiconductor |
| San Fu vs. Nuvoton Technology Corp | San Fu vs. Shiny Chemical Industrial | San Fu vs. Jinan Acetate Chemical | San Fu vs. Coremax 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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