Correlation Between Softstar Entertainment and CTBC Financial
Can any of the company-specific risk be diversified away by investing in both Softstar Entertainment 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 Softstar Entertainment and CTBC Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Softstar Entertainment and CTBC Financial Holding, you can compare the effects of market volatilities on Softstar Entertainment 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 Softstar Entertainment with a short position of CTBC Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Softstar Entertainment and CTBC Financial.
Diversification Opportunities for Softstar Entertainment and CTBC Financial
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Softstar and CTBC is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Softstar Entertainment 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 Softstar Entertainment 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 Softstar Entertainment 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 Softstar Entertainment i.e., Softstar Entertainment and CTBC Financial go up and down completely randomly.
Pair Corralation between Softstar Entertainment and CTBC Financial
Assuming the 90 days trading horizon Softstar Entertainment is expected to generate 8.96 times more return on investment than CTBC Financial. However, Softstar Entertainment is 8.96 times more volatile than CTBC Financial Holding. It trades about 0.03 of its potential returns per unit of risk. CTBC Financial Holding is currently generating about 0.02 per unit of risk. If you would invest 5,160 in Softstar Entertainment on August 25, 2024 and sell it today you would earn a total of 940.00 from holding Softstar Entertainment or generate 18.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Softstar Entertainment vs. CTBC Financial Holding
Performance |
| Timeline |
| Softstar Entertainment |
| CTBC Financial Holding |
Softstar Entertainment and CTBC Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Softstar Entertainment and CTBC Financial
The main advantage of trading using opposite Softstar Entertainment and CTBC Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Softstar Entertainment 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.| Softstar Entertainment vs. International Games System | Softstar Entertainment vs. X Legend Entertainment Co | Softstar Entertainment vs. Fun Yours Technology |
| CTBC Financial vs. Fubon Financial Holding | CTBC Financial vs. YuantaP shares Taiwan Top | CTBC Financial vs. YuantaP shares Taiwan Mid Cap | CTBC Financial vs. YuantaP shares Taiwan Electronics |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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