Correlation Between CSBC Corp and Farglory FTZ

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both CSBC Corp and Farglory FTZ 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 CSBC Corp and Farglory FTZ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSBC Corp Taiwan and Farglory FTZ Investment, you can compare the effects of market volatilities on CSBC Corp and Farglory FTZ 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 CSBC Corp with a short position of Farglory FTZ. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSBC Corp and Farglory FTZ.

Diversification Opportunities for CSBC Corp and Farglory FTZ

0.25
  Correlation Coefficient

Modest diversification

The 3 months correlation between CSBC and Farglory is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding CSBC Corp Taiwan and Farglory FTZ Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farglory FTZ Investment and CSBC 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 CSBC Corp Taiwan are associated (or correlated) with Farglory FTZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farglory FTZ Investment has no effect on the direction of CSBC Corp i.e., CSBC Corp and Farglory FTZ go up and down completely randomly.

Pair Corralation between CSBC Corp and Farglory FTZ

Assuming the 90 days trading horizon CSBC Corp Taiwan is expected to under-perform the Farglory FTZ. In addition to that, CSBC Corp is 1.07 times more volatile than Farglory FTZ Investment. It trades about -0.14 of its total potential returns per unit of risk. Farglory FTZ Investment is currently generating about -0.08 per unit of volatility. If you would invest  4,675  in Farglory FTZ Investment on September 18, 2024 and sell it today you would lose (295.00) from holding Farglory FTZ Investment or give up 6.31% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy98.44%
ValuesDaily Returns

CSBC Corp Taiwan  vs.  Farglory FTZ Investment

 Performance 
       Timeline  
CSBC Corp Taiwan 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CSBC Corp Taiwan has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.
Farglory FTZ Investment 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Farglory FTZ Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Farglory FTZ is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

CSBC Corp and Farglory FTZ Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CSBC Corp and Farglory FTZ

The main advantage of trading using opposite CSBC Corp and Farglory FTZ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSBC Corp position performs unexpectedly, Farglory FTZ 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 FTZ will offset losses from the drop in Farglory FTZ's long position.
The idea behind CSBC Corp Taiwan and Farglory FTZ Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

Other Complementary Tools

Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
CEOs Directory
Screen CEOs from public companies around the world
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets