Correlation Between Qualipoly Chemical and Cathay Financial
Can any of the company-specific risk be diversified away by investing in both Qualipoly Chemical and Cathay 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 Qualipoly Chemical and Cathay Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qualipoly Chemical Corp and Cathay Financial Holding, you can compare the effects of market volatilities on Qualipoly Chemical and Cathay 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 Qualipoly Chemical with a short position of Cathay Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qualipoly Chemical and Cathay Financial.
Diversification Opportunities for Qualipoly Chemical and Cathay Financial
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Qualipoly and Cathay is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Qualipoly Chemical Corp and Cathay Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathay Financial Holding and Qualipoly Chemical 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 Qualipoly Chemical Corp are associated (or correlated) with Cathay Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathay Financial Holding has no effect on the direction of Qualipoly Chemical i.e., Qualipoly Chemical and Cathay Financial go up and down completely randomly.
Pair Corralation between Qualipoly Chemical and Cathay Financial
Assuming the 90 days trading horizon Qualipoly Chemical Corp is expected to generate 5.8 times more return on investment than Cathay Financial. However, Qualipoly Chemical is 5.8 times more volatile than Cathay Financial Holding. It trades about 0.14 of its potential returns per unit of risk. Cathay Financial Holding is currently generating about 0.21 per unit of risk. If you would invest 4,390 in Qualipoly Chemical Corp on September 12, 2024 and sell it today you would earn a total of 135.00 from holding Qualipoly Chemical Corp or generate 3.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qualipoly Chemical Corp vs. Cathay Financial Holding
Performance |
| Timeline |
| Qualipoly Chemical Corp |
| Cathay Financial Holding |
Qualipoly Chemical and Cathay Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qualipoly Chemical and Cathay Financial
The main advantage of trading using opposite Qualipoly Chemical and Cathay Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qualipoly Chemical position performs unexpectedly, Cathay 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 Cathay Financial will offset losses from the drop in Cathay Financial's long position.| Qualipoly Chemical vs. Tainan Spinning Co | Qualipoly Chemical vs. Lealea Enterprise Co | Qualipoly Chemical vs. China Petrochemical Development | Qualipoly Chemical vs. Ruentex Development Co |
| Cathay Financial vs. Cathay Financial Holding | Cathay Financial vs. Fubon Financial Holding | Cathay Financial vs. CTBC Financial Holding | Cathay Financial vs. Mercuries Life Insurance |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |