Correlation Between CTCI Corp and FarGlory Hotel
Can any of the company-specific risk be diversified away by investing in both CTCI Corp and FarGlory Hotel 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 FarGlory Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTCI Corp and FarGlory Hotel Co, you can compare the effects of market volatilities on CTCI Corp and FarGlory Hotel 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 FarGlory Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTCI Corp and FarGlory Hotel.
Diversification Opportunities for CTCI Corp and FarGlory Hotel
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CTCI and FarGlory is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding CTCI Corp and FarGlory Hotel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FarGlory Hotel 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 FarGlory Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FarGlory Hotel has no effect on the direction of CTCI Corp i.e., CTCI Corp and FarGlory Hotel go up and down completely randomly.
Pair Corralation between CTCI Corp and FarGlory Hotel
Assuming the 90 days trading horizon CTCI Corp is expected to under-perform the FarGlory Hotel. But the stock apears to be less risky and, when comparing its historical volatility, CTCI Corp is 1.79 times less risky than FarGlory Hotel. The stock trades about -0.38 of its potential returns per unit of risk. The FarGlory Hotel Co is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 2,575 in FarGlory Hotel Co on August 31, 2024 and sell it today you would lose (110.00) from holding FarGlory Hotel Co or give up 4.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTCI Corp vs. FarGlory Hotel Co
Performance |
| Timeline |
| CTCI Corp |
| FarGlory Hotel |
CTCI Corp and FarGlory Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTCI Corp and FarGlory Hotel
The main advantage of trading using opposite CTCI Corp and FarGlory Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTCI Corp position performs unexpectedly, FarGlory Hotel 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 FarGlory Hotel will offset losses from the drop in FarGlory Hotel'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 |
| FarGlory Hotel vs. Ambassador Hotel | FarGlory Hotel vs. Lion Travel Service | FarGlory Hotel vs. Chateau International Development | FarGlory Hotel vs. First Hotel Co |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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