Correlation Between CTBC Financial and Sampo Corp
Can any of the company-specific risk be diversified away by investing in both CTBC Financial and Sampo Corp 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 Sampo Corp 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 Sampo Corp, you can compare the effects of market volatilities on CTBC Financial and Sampo Corp 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 Sampo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTBC Financial and Sampo Corp.
Diversification Opportunities for CTBC Financial and Sampo Corp
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CTBC and Sampo is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding CTBC Financial Holding and Sampo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sampo Corp 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 Sampo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sampo Corp has no effect on the direction of CTBC Financial i.e., CTBC Financial and Sampo Corp go up and down completely randomly.
Pair Corralation between CTBC Financial and Sampo Corp
Assuming the 90 days trading horizon CTBC Financial Holding is expected to under-perform the Sampo Corp. But the stock apears to be less risky and, when comparing its historical volatility, CTBC Financial Holding is 2.75 times less risky than Sampo Corp. The stock trades about -0.05 of its potential returns per unit of risk. The Sampo Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2,890 in Sampo Corp on August 29, 2024 and sell it today you would lose (45.00) from holding Sampo Corp or give up 1.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
CTBC Financial Holding vs. Sampo Corp
Performance |
| Timeline |
| CTBC Financial Holding |
| Sampo Corp |
CTBC Financial and Sampo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTBC Financial and Sampo Corp
The main advantage of trading using opposite CTBC Financial and Sampo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTBC Financial position performs unexpectedly, Sampo Corp 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 Sampo Corp will offset losses from the drop in Sampo Corp's long position.| CTBC Financial vs. Cathay Financial Holding | CTBC Financial vs. Cathay Financial Holding | CTBC Financial vs. Fubon Financial Holding | CTBC Financial vs. Mercuries Life Insurance |
| Sampo Corp vs. Yulon Finance Corp | Sampo Corp vs. Taiwan Secom Co | Sampo Corp vs. Pou Chen Corp | Sampo Corp vs. Great Wall Enterprise |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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