Correlation Between CTBC Financial and Ingentec
Can any of the company-specific risk be diversified away by investing in both CTBC Financial and Ingentec 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 Ingentec 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 Ingentec, you can compare the effects of market volatilities on CTBC Financial and Ingentec 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 Ingentec. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTBC Financial and Ingentec.
Diversification Opportunities for CTBC Financial and Ingentec
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CTBC and Ingentec is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding CTBC Financial Holding and Ingentec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingentec 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 Ingentec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingentec has no effect on the direction of CTBC Financial i.e., CTBC Financial and Ingentec go up and down completely randomly.
Pair Corralation between CTBC Financial and Ingentec
Assuming the 90 days trading horizon CTBC Financial is expected to generate 10.81 times less return on investment than Ingentec. But when comparing it to its historical volatility, CTBC Financial Holding is 9.9 times less risky than Ingentec. It trades about 0.02 of its potential returns per unit of risk. Ingentec is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 17,846 in Ingentec on August 26, 2024 and sell it today you would earn a total of 2,304 from holding Ingentec or generate 12.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
CTBC Financial Holding vs. Ingentec
Performance |
| Timeline |
| CTBC Financial Holding |
| Ingentec |
CTBC Financial and Ingentec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTBC Financial and Ingentec
The main advantage of trading using opposite CTBC Financial and Ingentec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTBC Financial position performs unexpectedly, Ingentec 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 Ingentec will offset losses from the drop in Ingentec's long position.| CTBC Financial vs. Fubon Financial Holding | CTBC Financial vs. YuantaP shares Taiwan Top | CTBC Financial vs. YuantaP shares Taiwan Mid Cap | CTBC Financial vs. YuantaP shares Taiwan Electronics |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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