Correlation Between CTCI Corp and Cathay TAIEX
Can any of the company-specific risk be diversified away by investing in both CTCI Corp and Cathay TAIEX 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 Cathay TAIEX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTCI Corp and Cathay TAIEX Daily, you can compare the effects of market volatilities on CTCI Corp and Cathay TAIEX 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 Cathay TAIEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTCI Corp and Cathay TAIEX.
Diversification Opportunities for CTCI Corp and Cathay TAIEX
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CTCI and Cathay is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding CTCI Corp and Cathay TAIEX Daily in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathay TAIEX 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 Cathay TAIEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathay TAIEX Daily has no effect on the direction of CTCI Corp i.e., CTCI Corp and Cathay TAIEX go up and down completely randomly.
Pair Corralation between CTCI Corp and Cathay TAIEX
Assuming the 90 days trading horizon CTCI Corp is expected to under-perform the Cathay TAIEX. But the stock apears to be less risky and, when comparing its historical volatility, CTCI Corp is 1.1 times less risky than Cathay TAIEX. The stock trades about -0.36 of its potential returns per unit of risk. The Cathay TAIEX Daily is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 376.00 in Cathay TAIEX Daily on September 2, 2024 and sell it today you would earn a total of 7.00 from holding Cathay TAIEX Daily or generate 1.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTCI Corp vs. Cathay TAIEX Daily
Performance |
| Timeline |
| CTCI Corp |
| Cathay TAIEX Daily |
CTCI Corp and Cathay TAIEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTCI Corp and Cathay TAIEX
The main advantage of trading using opposite CTCI Corp and Cathay TAIEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTCI Corp position performs unexpectedly, Cathay TAIEX 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 TAIEX will offset losses from the drop in Cathay TAIEX's long position.| CTCI Corp vs. Taiwan Secom Co | CTCI Corp vs. Pou Chen Corp | CTCI Corp vs. Formosa Petrochemical Corp | CTCI Corp vs. Cheng Shin Rubber |
| Cathay TAIEX vs. Yuanta Daily Taiwan | Cathay TAIEX vs. Yuanta Daily CSI | Cathay TAIEX vs. Fubon FTSE Vietnam | Cathay TAIEX vs. Paradigm SP GSCI |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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