Correlation Between Advanced Wireless and CTBC Financial
Can any of the company-specific risk be diversified away by investing in both Advanced Wireless 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 Advanced Wireless and CTBC 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 CTBC Financial Holding, you can compare the effects of market volatilities on Advanced Wireless 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 Advanced Wireless with a short position of CTBC Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Wireless and CTBC Financial.
Diversification Opportunities for Advanced Wireless and CTBC Financial
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Advanced and CTBC is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Wireless Semiconducto 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 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 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 Advanced Wireless i.e., Advanced Wireless and CTBC Financial go up and down completely randomly.
Pair Corralation between Advanced Wireless and CTBC Financial
Assuming the 90 days trading horizon Advanced Wireless Semiconductor is expected to under-perform the CTBC Financial. In addition to that, Advanced Wireless is 8.01 times more volatile than CTBC Financial Holding. It trades about -0.05 of its total potential returns per unit of risk. CTBC Financial Holding is currently generating about 0.03 per unit of volatility. If you would invest 6,010 in CTBC Financial Holding on August 31, 2024 and sell it today you would earn a total of 70.00 from holding CTBC Financial Holding or generate 1.16% 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. CTBC Financial Holding
Performance |
| Timeline |
| Advanced Wireless |
| CTBC Financial Holding |
Advanced Wireless and CTBC Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Wireless and CTBC Financial
The main advantage of trading using opposite Advanced Wireless and CTBC Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Wireless 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.| Advanced Wireless vs. WIN Semiconductors | Advanced Wireless vs. Visual Photonics Epitaxy | Advanced Wireless vs. GlobalWafers Co | Advanced Wireless vs. Unimicron Technology Corp |
| CTBC Financial vs. Tradetool Auto Co | CTBC Financial vs. Shih Kuen Plastics | CTBC Financial vs. Hotel Holiday Garden | CTBC Financial vs. FDC International Hotels |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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