Correlation Between CTBC Financial and CTCI Corp
Can any of the company-specific risk be diversified away by investing in both CTBC Financial and CTCI 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 CTCI 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 CTCI Corp, you can compare the effects of market volatilities on CTBC Financial and CTCI 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 CTCI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTBC Financial and CTCI Corp.
Diversification Opportunities for CTBC Financial and CTCI Corp
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CTBC and CTCI is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding CTBC Financial Holding and CTCI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTCI 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 CTCI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTCI Corp has no effect on the direction of CTBC Financial i.e., CTBC Financial and CTCI Corp go up and down completely randomly.
Pair Corralation between CTBC Financial and CTCI Corp
Assuming the 90 days trading horizon CTBC Financial Holding is expected to generate 0.31 times more return on investment than CTCI Corp. However, CTBC Financial Holding is 3.2 times less risky than CTCI Corp. It trades about 0.4 of its potential returns per unit of risk. CTCI Corp is currently generating about -0.02 per unit of risk. If you would invest 5,690 in CTBC Financial Holding on October 25, 2024 and sell it today you would earn a total of 150.00 from holding CTBC Financial Holding or generate 2.64% 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. CTCI Corp
Performance |
| Timeline |
| CTBC Financial Holding |
| CTCI Corp |
CTBC Financial and CTCI Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTBC Financial and CTCI Corp
The main advantage of trading using opposite CTBC Financial and CTCI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTBC Financial position performs unexpectedly, CTCI 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 CTCI Corp will offset losses from the drop in CTCI Corp'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 |
| CTCI Corp vs. Taiwan Secom Co | CTCI Corp vs. Pou Chen Corp | CTCI Corp vs. Formosa Petrochemical Corp | CTCI Corp vs. Cheng Shin Rubber |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |