Correlation Between CTCI Corp and Feng Tay
Can any of the company-specific risk be diversified away by investing in both CTCI Corp and Feng Tay 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 Feng Tay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTCI Corp and Feng Tay Enterprises, you can compare the effects of market volatilities on CTCI Corp and Feng Tay 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 Feng Tay. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTCI Corp and Feng Tay.
Diversification Opportunities for CTCI Corp and Feng Tay
Very weak diversification
The 3 months correlation between CTCI and Feng is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding CTCI Corp and Feng Tay Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Feng Tay Enterprises 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 Feng Tay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Feng Tay Enterprises has no effect on the direction of CTCI Corp i.e., CTCI Corp and Feng Tay go up and down completely randomly.
Pair Corralation between CTCI Corp and Feng Tay
Assuming the 90 days trading horizon CTCI Corp is expected to generate 0.8 times more return on investment than Feng Tay. However, CTCI Corp is 1.24 times less risky than Feng Tay. It trades about 0.01 of its potential returns per unit of risk. Feng Tay Enterprises is currently generating about -0.04 per unit of risk. If you would invest 3,970 in CTCI Corp on August 29, 2024 and sell it today you would earn a total of 110.00 from holding CTCI Corp or generate 2.77% 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. Feng Tay Enterprises
Performance |
| Timeline |
| CTCI Corp |
| Feng Tay Enterprises |
CTCI Corp and Feng Tay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTCI Corp and Feng Tay
The main advantage of trading using opposite CTCI Corp and Feng Tay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTCI Corp position performs unexpectedly, Feng Tay 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 Feng Tay will offset losses from the drop in Feng Tay'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 |
| Feng Tay vs. Pou Chen Corp | Feng Tay vs. Eclat Textile Co | Feng Tay vs. Hotai Motor Co | Feng Tay vs. Giant Manufacturing 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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