Correlation Between CVC Technologies and CTBC Financial
Can any of the company-specific risk be diversified away by investing in both CVC Technologies 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 CVC Technologies and CTBC Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVC Technologies and CTBC Financial Holding, you can compare the effects of market volatilities on CVC Technologies 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 CVC Technologies with a short position of CTBC Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVC Technologies and CTBC Financial.
Diversification Opportunities for CVC Technologies and CTBC Financial
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CVC and CTBC is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding CVC Technologies 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 CVC Technologies 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 CVC Technologies 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 CVC Technologies i.e., CVC Technologies and CTBC Financial go up and down completely randomly.
Pair Corralation between CVC Technologies and CTBC Financial
Assuming the 90 days trading horizon CVC Technologies is expected to generate 10.37 times more return on investment than CTBC Financial. However, CVC Technologies is 10.37 times more volatile than CTBC Financial Holding. It trades about 0.17 of its potential returns per unit of risk. CTBC Financial Holding is currently generating about 0.36 per unit of risk. If you would invest 2,020 in CVC Technologies on October 12, 2024 and sell it today you would earn a total of 230.00 from holding CVC Technologies or generate 11.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVC Technologies vs. CTBC Financial Holding
Performance |
| Timeline |
| CVC Technologies |
| CTBC Financial Holding |
CVC Technologies and CTBC Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVC Technologies and CTBC Financial
The main advantage of trading using opposite CVC Technologies and CTBC Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVC Technologies 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.| CVC Technologies vs. Posiflex Technology | CVC Technologies vs. United Radiant Technology | CVC Technologies vs. Arbor Technology | CVC Technologies vs. SciVision Biotech |
| CTBC Financial vs. Asmedia Technology | CTBC Financial vs. CVC Technologies | CTBC Financial vs. Union Insurance Co | CTBC Financial vs. Century Iron And |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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