Correlation Between CTCI Corp and Kee Tai
Can any of the company-specific risk be diversified away by investing in both CTCI Corp and Kee Tai 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 Kee Tai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTCI Corp and Kee Tai Properties, you can compare the effects of market volatilities on CTCI Corp and Kee Tai 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 Kee Tai. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTCI Corp and Kee Tai.
Diversification Opportunities for CTCI Corp and Kee Tai
Poor diversification
The 3 months correlation between CTCI and Kee is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding CTCI Corp and Kee Tai Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kee Tai Properties 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 Kee Tai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kee Tai Properties has no effect on the direction of CTCI Corp i.e., CTCI Corp and Kee Tai go up and down completely randomly.
Pair Corralation between CTCI Corp and Kee Tai
Assuming the 90 days trading horizon CTCI Corp is expected to under-perform the Kee Tai. But the stock apears to be less risky and, when comparing its historical volatility, CTCI Corp is 1.37 times less risky than Kee Tai. The stock trades about -0.37 of its potential returns per unit of risk. The Kee Tai Properties is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,615 in Kee Tai Properties on August 29, 2024 and sell it today you would earn a total of 15.00 from holding Kee Tai Properties or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTCI Corp vs. Kee Tai Properties
Performance |
| Timeline |
| CTCI Corp |
| Kee Tai Properties |
CTCI Corp and Kee Tai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTCI Corp and Kee Tai
The main advantage of trading using opposite CTCI Corp and Kee Tai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTCI Corp position performs unexpectedly, Kee Tai 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 Kee Tai will offset losses from the drop in Kee Tai'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 |
| Kee Tai vs. Tainan Spinning Co | Kee Tai vs. Carnival Industrial Corp | Kee Tai vs. Symtek Automation Asia | Kee Tai vs. CTCI Corp |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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