Correlation Between CTBC Financial and Hsinjing Holding
Can any of the company-specific risk be diversified away by investing in both CTBC Financial and Hsinjing Holding 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 CTBC Financial and Hsinjing Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTBC Financial Holding and Hsinjing Holding Co, you can compare the effects of market volatilities on CTBC Financial and Hsinjing Holding 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 CTBC Financial with a short position of Hsinjing Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTBC Financial and Hsinjing Holding.
Diversification Opportunities for CTBC Financial and Hsinjing Holding
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CTBC and Hsinjing is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding CTBC Financial Holding and Hsinjing Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hsinjing Holding and CTBC Financial 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 CTBC Financial Holding are associated (or correlated) with Hsinjing Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hsinjing Holding has no effect on the direction of CTBC Financial i.e., CTBC Financial and Hsinjing Holding go up and down completely randomly.
Pair Corralation between CTBC Financial and Hsinjing Holding
Assuming the 90 days trading horizon CTBC Financial Holding is expected to generate 0.49 times more return on investment than Hsinjing Holding. However, CTBC Financial Holding is 2.04 times less risky than Hsinjing Holding. It trades about 0.13 of its potential returns per unit of risk. Hsinjing Holding Co is currently generating about -0.04 per unit of risk. If you would invest 3,880 in CTBC Financial Holding on December 4, 2024 and sell it today you would earn a total of 225.00 from holding CTBC Financial Holding or generate 5.8% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 98.21% |
Values | Daily Returns |
CTBC Financial Holding vs. Hsinjing Holding Co
Performance |
Timeline |
CTBC Financial Holding |
Hsinjing Holding |
CTBC Financial and Hsinjing Holding Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CTBC Financial and Hsinjing Holding
The main advantage of trading using opposite CTBC Financial and Hsinjing Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTBC Financial position performs unexpectedly, Hsinjing Holding 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 Hsinjing Holding will offset losses from the drop in Hsinjing Holding's long position.CTBC Financial vs. Fubon Financial Holding | CTBC Financial vs. Cathay Financial Holding | CTBC Financial vs. Mega Financial Holding | CTBC Financial vs. First Financial Holding |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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