Correlation Between CTCI Corp and Fuh Hwa

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Can any of the company-specific risk be diversified away by investing in both CTCI Corp and Fuh Hwa 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 CTCI Corp and Fuh Hwa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTCI Corp and Fuh Hwa Daily, you can compare the effects of market volatilities on CTCI Corp and Fuh Hwa 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 CTCI Corp with a short position of Fuh Hwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTCI Corp and Fuh Hwa.

Diversification Opportunities for CTCI Corp and Fuh Hwa

-0.12
  Correlation Coefficient

Good diversification

The 3 months correlation between CTCI and Fuh is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding CTCI Corp and Fuh Hwa Daily in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuh Hwa Daily and CTCI Corp 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 CTCI Corp are associated (or correlated) with Fuh Hwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuh Hwa Daily has no effect on the direction of CTCI Corp i.e., CTCI Corp and Fuh Hwa go up and down completely randomly.

Pair Corralation between CTCI Corp and Fuh Hwa

Assuming the 90 days trading horizon CTCI Corp is expected to under-perform the Fuh Hwa. But the stock apears to be less risky and, when comparing its historical volatility, CTCI Corp is 3.2 times less risky than Fuh Hwa. The stock trades about -0.19 of its potential returns per unit of risk. The Fuh Hwa Daily is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,267  in Fuh Hwa Daily on September 12, 2024 and sell it today you would earn a total of  18.00  from holding Fuh Hwa Daily or generate 1.42% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

CTCI Corp  vs.  Fuh Hwa Daily

 Performance 
       Timeline  
CTCI Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CTCI Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.
Fuh Hwa Daily 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Fuh Hwa Daily are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Fuh Hwa sustained solid returns over the last few months and may actually be approaching a breakup point.

CTCI Corp and Fuh Hwa Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CTCI Corp and Fuh Hwa

The main advantage of trading using opposite CTCI Corp and Fuh Hwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTCI Corp position performs unexpectedly, Fuh Hwa 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 Fuh Hwa will offset losses from the drop in Fuh Hwa's long position.
The idea behind CTCI Corp and Fuh Hwa Daily pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

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