Correlation Between Wha Yu and CTBC Financial
Can any of the company-specific risk be diversified away by investing in both Wha Yu and CTBC Financial 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 Wha Yu and CTBC Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wha Yu Industrial and CTBC Financial Holding, you can compare the effects of market volatilities on Wha Yu and CTBC Financial 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 Wha Yu with a short position of CTBC Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wha Yu and CTBC Financial.
Diversification Opportunities for Wha Yu and CTBC Financial
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wha and CTBC is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Wha Yu Industrial and CTBC Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTBC Financial Holding and Wha Yu 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 Wha Yu Industrial are associated (or correlated) with CTBC Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTBC Financial Holding has no effect on the direction of Wha Yu i.e., Wha Yu and CTBC Financial go up and down completely randomly.
Pair Corralation between Wha Yu and CTBC Financial
Assuming the 90 days trading horizon Wha Yu Industrial is expected to generate 6.92 times more return on investment than CTBC Financial. However, Wha Yu is 6.92 times more volatile than CTBC Financial Holding. It trades about 0.01 of its potential returns per unit of risk. CTBC Financial Holding is currently generating about 0.04 per unit of risk. If you would invest 1,755 in Wha Yu Industrial on October 21, 2024 and sell it today you would lose (40.00) from holding Wha Yu Industrial or give up 2.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wha Yu Industrial vs. CTBC Financial Holding
Performance |
| Timeline |
| Wha Yu Industrial |
| CTBC Financial Holding |
Wha Yu and CTBC Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wha Yu and CTBC Financial
The main advantage of trading using opposite Wha Yu and CTBC Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wha Yu position performs unexpectedly, CTBC Financial 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 CTBC Financial will offset losses from the drop in CTBC Financial's long position.| Wha Yu vs. ASRock Inc | Wha Yu vs. FIC Global | Wha Yu vs. In Win Development | Wha Yu vs. Getac Technology Corp |
| CTBC Financial vs. Unique Optical Industrial | CTBC Financial vs. Wha Yu Industrial | CTBC Financial vs. Nankang Rubber Tire | CTBC Financial vs. Shih Kuen Plastics |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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