Correlation Between CTBC Financial and Jetway Information
Can any of the company-specific risk be diversified away by investing in both CTBC Financial and Jetway Information 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 Jetway Information 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 Jetway Information Co, you can compare the effects of market volatilities on CTBC Financial and Jetway Information 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 Jetway Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTBC Financial and Jetway Information.
Diversification Opportunities for CTBC Financial and Jetway Information
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between CTBC and Jetway is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding CTBC Financial Holding and Jetway Information Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jetway Information 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 Jetway Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jetway Information has no effect on the direction of CTBC Financial i.e., CTBC Financial and Jetway Information go up and down completely randomly.
Pair Corralation between CTBC Financial and Jetway Information
Assuming the 90 days trading horizon CTBC Financial Holding is expected to generate 0.18 times more return on investment than Jetway Information. However, CTBC Financial Holding is 5.52 times less risky than Jetway Information. It trades about 0.31 of its potential returns per unit of risk. Jetway Information Co is currently generating about -0.07 per unit of risk. If you would invest 5,590 in CTBC Financial Holding on October 12, 2024 and sell it today you would earn a total of 210.00 from holding CTBC Financial Holding or generate 3.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTBC Financial Holding vs. Jetway Information Co
Performance |
| Timeline |
| CTBC Financial Holding |
| Jetway Information |
CTBC Financial and Jetway Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTBC Financial and Jetway Information
The main advantage of trading using opposite CTBC Financial and Jetway Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTBC Financial position performs unexpectedly, Jetway Information 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 Jetway Information will offset losses from the drop in Jetway Information's long position.| CTBC Financial vs. Asmedia Technology | CTBC Financial vs. CVC Technologies | CTBC Financial vs. Union Insurance Co | CTBC Financial vs. Century Iron And |
| Jetway Information vs. Sesoda Corp | Jetway Information vs. First Insurance Co | Jetway Information vs. CTBC Financial Holding | Jetway Information vs. Dynamic Medical Technologies |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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