Correlation Between CTBC Financial and Kaori Heat
Can any of the company-specific risk be diversified away by investing in both CTBC Financial and Kaori Heat 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 Kaori Heat 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 Kaori Heat Treatment, you can compare the effects of market volatilities on CTBC Financial and Kaori Heat 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 Kaori Heat. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTBC Financial and Kaori Heat.
Diversification Opportunities for CTBC Financial and Kaori Heat
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CTBC and Kaori is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding CTBC Financial Holding and Kaori Heat Treatment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaori Heat Treatment 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 Kaori Heat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaori Heat Treatment has no effect on the direction of CTBC Financial i.e., CTBC Financial and Kaori Heat go up and down completely randomly.
Pair Corralation between CTBC Financial and Kaori Heat
Assuming the 90 days trading horizon CTBC Financial Holding is expected to generate 0.09 times more return on investment than Kaori Heat. However, CTBC Financial Holding is 11.35 times less risky than Kaori Heat. It trades about 0.57 of its potential returns per unit of risk. Kaori Heat Treatment is currently generating about -0.26 per unit of risk. If you would invest 6,150 in CTBC Financial Holding on October 23, 2024 and sell it today you would earn a total of 130.00 from holding CTBC Financial Holding or generate 2.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
CTBC Financial Holding vs. Kaori Heat Treatment
Performance |
| Timeline |
| CTBC Financial Holding |
| Kaori Heat Treatment |
CTBC Financial and Kaori Heat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTBC Financial and Kaori Heat
The main advantage of trading using opposite CTBC Financial and Kaori Heat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTBC Financial position performs unexpectedly, Kaori Heat 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 Kaori Heat will offset losses from the drop in Kaori Heat's long position.| CTBC Financial vs. Great China Metal | CTBC Financial vs. Ibase Gaming | CTBC Financial vs. Dadi Early Childhood Education | CTBC Financial vs. Pacific Hospital Supply |
| Kaori Heat vs. Chung Hsin Electric Machinery | Kaori Heat vs. TECO Electric Machinery | Kaori Heat vs. Allis Electric Co | Kaori Heat vs. BenQ Materials 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |