Correlation Between CTBC Financial and Center Laboratories
Can any of the company-specific risk be diversified away by investing in both CTBC Financial and Center Laboratories 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 Center Laboratories 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 Center Laboratories, you can compare the effects of market volatilities on CTBC Financial and Center Laboratories 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 Center Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTBC Financial and Center Laboratories.
Diversification Opportunities for CTBC Financial and Center Laboratories
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CTBC and Center is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding CTBC Financial Holding and Center Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Center Laboratories 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 Center Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Center Laboratories has no effect on the direction of CTBC Financial i.e., CTBC Financial and Center Laboratories go up and down completely randomly.
Pair Corralation between CTBC Financial and Center Laboratories
Assuming the 90 days trading horizon CTBC Financial is expected to generate 13.84 times less return on investment than Center Laboratories. But when comparing it to its historical volatility, CTBC Financial Holding is 16.28 times less risky than Center Laboratories. It trades about 0.03 of its potential returns per unit of risk. Center Laboratories is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4,169 in Center Laboratories on September 3, 2024 and sell it today you would earn a total of 431.00 from holding Center Laboratories or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTBC Financial Holding vs. Center Laboratories
Performance |
| Timeline |
| CTBC Financial Holding |
| Center Laboratories |
CTBC Financial and Center Laboratories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTBC Financial and Center Laboratories
The main advantage of trading using opposite CTBC Financial and Center Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTBC Financial position performs unexpectedly, Center Laboratories 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 Center Laboratories will offset losses from the drop in Center Laboratories' long position.| CTBC Financial vs. Cathay Financial Holding | CTBC Financial vs. Fubon Financial Holding | CTBC Financial vs. Mercuries Life Insurance | CTBC Financial vs. Mercuries Associates Holding |
| Center Laboratories vs. TTY Biopharm Co | Center Laboratories vs. TCI Co | Center Laboratories vs. Synmosa Biopharma | Center Laboratories vs. Adimmune 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |