Correlation Between CTCI Corp and China Development
Can any of the company-specific risk be diversified away by investing in both CTCI Corp and China Development 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 China Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTCI Corp and China Development Financial, you can compare the effects of market volatilities on CTCI Corp and China Development 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 China Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTCI Corp and China Development.
Diversification Opportunities for CTCI Corp and China Development
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CTCI and China is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding CTCI Corp and China Development Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Development 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 China Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Development has no effect on the direction of CTCI Corp i.e., CTCI Corp and China Development go up and down completely randomly.
Pair Corralation between CTCI Corp and China Development
Assuming the 90 days trading horizon CTCI Corp is expected to under-perform the China Development. But the stock apears to be less risky and, when comparing its historical volatility, CTCI Corp is 1.15 times less risky than China Development. The stock trades about -0.38 of its potential returns per unit of risk. The China Development Financial is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,665 in China Development Financial on August 30, 2024 and sell it today you would earn a total of 55.00 from holding China Development Financial or generate 3.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTCI Corp vs. China Development Financial
Performance |
| Timeline |
| CTCI Corp |
| China Development |
CTCI Corp and China Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTCI Corp and China Development
The main advantage of trading using opposite CTCI Corp and China Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTCI Corp position performs unexpectedly, China Development 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 China Development will offset losses from the drop in China Development'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 |
| China Development vs. Cathay Financial Holding | China Development vs. Mega Financial Holding | China Development vs. CTBC Financial Holding | China Development vs. Fubon Financial Holding |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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