Correlation Between Advanced Wireless and Cathay Financial
Can any of the company-specific risk be diversified away by investing in both Advanced Wireless 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 Advanced Wireless and Cathay Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Wireless Semiconductor and Cathay Financial Holding, you can compare the effects of market volatilities on Advanced Wireless 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 Advanced Wireless with a short position of Cathay Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Wireless and Cathay Financial.
Diversification Opportunities for Advanced Wireless and Cathay Financial
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Advanced and Cathay is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Wireless Semiconducto 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 Advanced Wireless 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 Advanced Wireless Semiconductor 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 Advanced Wireless i.e., Advanced Wireless and Cathay Financial go up and down completely randomly.
Pair Corralation between Advanced Wireless and Cathay Financial
Assuming the 90 days trading horizon Advanced Wireless Semiconductor is expected to generate 11.19 times more return on investment than Cathay Financial. However, Advanced Wireless is 11.19 times more volatile than Cathay Financial Holding. It trades about 0.07 of its potential returns per unit of risk. Cathay Financial Holding is currently generating about 0.04 per unit of risk. If you would invest 9,780 in Advanced Wireless Semiconductor on August 26, 2024 and sell it today you would earn a total of 320.00 from holding Advanced Wireless Semiconductor or generate 3.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Wireless Semiconducto vs. Cathay Financial Holding
Performance |
| Timeline |
| Advanced Wireless |
| Cathay Financial Holding |
Advanced Wireless and Cathay Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Wireless and Cathay Financial
The main advantage of trading using opposite Advanced Wireless and Cathay Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Wireless 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.| Advanced Wireless vs. WIN Semiconductors | Advanced Wireless vs. Visual Photonics Epitaxy | Advanced Wireless vs. GlobalWafers Co | Advanced Wireless vs. Unimicron Technology Corp |
| Cathay Financial vs. Evergreen International Storage | Cathay Financial vs. Mitake Information | Cathay Financial vs. Far EasTone Telecommunications | Cathay Financial vs. PChome Online |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |