Correlation Between CTBC Financial and Waffer Technology
Can any of the company-specific risk be diversified away by investing in both CTBC Financial and Waffer Technology 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 Waffer Technology 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 Waffer Technology Corp, you can compare the effects of market volatilities on CTBC Financial and Waffer Technology 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 Waffer Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTBC Financial and Waffer Technology.
Diversification Opportunities for CTBC Financial and Waffer Technology
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CTBC and Waffer is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding CTBC Financial Holding and Waffer Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waffer Technology 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 Waffer Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waffer Technology Corp has no effect on the direction of CTBC Financial i.e., CTBC Financial and Waffer Technology go up and down completely randomly.
Pair Corralation between CTBC Financial and Waffer Technology
Assuming the 90 days trading horizon CTBC Financial is expected to generate 383.01 times less return on investment than Waffer Technology. But when comparing it to its historical volatility, CTBC Financial Holding is 236.27 times less risky than Waffer Technology. It trades about 0.03 of its potential returns per unit of risk. Waffer Technology Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 10,800 in Waffer Technology Corp on October 25, 2024 and sell it today you would lose (4,810) from holding Waffer Technology Corp or give up 44.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTBC Financial Holding vs. Waffer Technology Corp
Performance |
| Timeline |
| CTBC Financial Holding |
| Waffer Technology Corp |
CTBC Financial and Waffer Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTBC Financial and Waffer Technology
The main advantage of trading using opposite CTBC Financial and Waffer Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTBC Financial position performs unexpectedly, Waffer Technology 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 Waffer Technology will offset losses from the drop in Waffer Technology's long position.| CTBC Financial vs. Oceanic Beverages Co | CTBC Financial vs. Posiflex Technology | CTBC Financial vs. Yuan High Tech Development | CTBC Financial vs. Voltronic Power Technology |
| Waffer Technology vs. Chang Type Industrial | Waffer Technology vs. Anderson Industrial Corp | Waffer Technology vs. Klingon Aerospace | Waffer Technology vs. Basso Industry 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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