Correlation Between United Radiant and CTBC Financial
Can any of the company-specific risk be diversified away by investing in both United Radiant 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 United Radiant and CTBC Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Radiant Technology and CTBC Financial Holding, you can compare the effects of market volatilities on United Radiant 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 United Radiant with a short position of CTBC Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Radiant and CTBC Financial.
Diversification Opportunities for United Radiant and CTBC Financial
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and CTBC is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding United Radiant Technology 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 United Radiant 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 United Radiant Technology 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 United Radiant i.e., United Radiant and CTBC Financial go up and down completely randomly.
Pair Corralation between United Radiant and CTBC Financial
Assuming the 90 days trading horizon United Radiant Technology is expected to generate 9.19 times more return on investment than CTBC Financial. However, United Radiant is 9.19 times more volatile than CTBC Financial Holding. It trades about 0.15 of its potential returns per unit of risk. CTBC Financial Holding is currently generating about -0.1 per unit of risk. If you would invest 1,825 in United Radiant Technology on September 2, 2024 and sell it today you would earn a total of 465.00 from holding United Radiant Technology or generate 25.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Radiant Technology vs. CTBC Financial Holding
Performance |
| Timeline |
| United Radiant Technology |
| CTBC Financial Holding |
United Radiant and CTBC Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Radiant and CTBC Financial
The main advantage of trading using opposite United Radiant and CTBC Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Radiant 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.| United Radiant vs. Hon Hai Precision | United Radiant vs. Delta Electronics | United Radiant vs. LARGAN Precision Co | United Radiant vs. Yageo Corp |
| CTBC Financial vs. Cathay Financial Holding | CTBC Financial vs. Cathay Financial Holding | CTBC Financial vs. Fubon Financial Holding | CTBC 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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