Correlation Between CTBC Financial and Grand Fortune
Can any of the company-specific risk be diversified away by investing in both CTBC Financial and Grand Fortune 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 Grand Fortune 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 Grand Fortune Securities, you can compare the effects of market volatilities on CTBC Financial and Grand Fortune 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 Grand Fortune. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTBC Financial and Grand Fortune.
Diversification Opportunities for CTBC Financial and Grand Fortune
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CTBC and Grand is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding CTBC Financial Holding and Grand Fortune Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Fortune Securities 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 Grand Fortune. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Fortune Securities has no effect on the direction of CTBC Financial i.e., CTBC Financial and Grand Fortune go up and down completely randomly.
Pair Corralation between CTBC Financial and Grand Fortune
Assuming the 90 days trading horizon CTBC Financial is expected to generate 3.61 times less return on investment than Grand Fortune. But when comparing it to its historical volatility, CTBC Financial Holding is 5.29 times less risky than Grand Fortune. It trades about 0.04 of its potential returns per unit of risk. Grand Fortune Securities is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,159 in Grand Fortune Securities on September 14, 2024 and sell it today you would earn a total of 96.00 from holding Grand Fortune Securities or generate 8.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTBC Financial Holding vs. Grand Fortune Securities
Performance |
| Timeline |
| CTBC Financial Holding |
| Grand Fortune Securities |
CTBC Financial and Grand Fortune Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTBC Financial and Grand Fortune
The main advantage of trading using opposite CTBC Financial and Grand Fortune positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTBC Financial position performs unexpectedly, Grand Fortune 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 Grand Fortune will offset losses from the drop in Grand Fortune's long position.| CTBC Financial vs. Sinopac Financial Holdings | CTBC Financial vs. Fulin Plastic Industry | CTBC Financial vs. Sports Gear Co | CTBC Financial vs. Chung Lien Transportation |
| Grand Fortune vs. IBF Financial Holdings | Grand Fortune vs. Capital Securities Corp | Grand Fortune vs. President Securities Corp | Grand Fortune vs. China Bills Finance |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |