Correlation Between CTBC Financial and Dimerco Data

Can any of the company-specific risk be diversified away by investing in both CTBC Financial and Dimerco Data 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 Dimerco Data 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 Dimerco Data System, you can compare the effects of market volatilities on CTBC Financial and Dimerco Data 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 Dimerco Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTBC Financial and Dimerco Data.

Diversification Opportunities for CTBC Financial and Dimerco Data

-0.3

Correlation Coefficient

CTBC Financial  Dimerco Data

Very good diversification

The 3 months correlation between CTBC and Dimerco is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding CTBC Financial Holding and Dimerco Data System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimerco Data System 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 Dimerco Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimerco Data System has no effect on the direction of CTBC Financial i.e., CTBC Financial and Dimerco Data go up and down completely randomly.

Pair Corralation between CTBC Financial and Dimerco Data

Assuming the 90 days trading horizon CTBC Financial Holding is expected to generate 1.28 times more return on investment than Dimerco Data. However, CTBC Financial is 1.28 times more volatile than Dimerco Data System. It trades about 0.04 of its potential returns per unit of risk. Dimerco Data System is currently generating about 0.0 per unit of risk. If you would invest  3,725  in CTBC Financial Holding on September 14, 2024 and sell it today you would earn a total of  235.00  from holding CTBC Financial Holding or generate 6.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CTBC Financial Holding  vs.  Dimerco Data System

CTBC Financial Holding

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CTBC Financial Holding are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, CTBC Financial showed solid returns over the last few months and may actually be approaching a breakup point.

Dimerco Data System

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dimerco Data System are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Dimerco Data is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with CTBC Financial and Dimerco Data

The main advantage of trading using opposite CTBC Financial and Dimerco Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTBC Financial position performs unexpectedly, Dimerco Data 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 Dimerco Data will offset losses from the drop in Dimerco Data's long position.

The idea behind CTBC Financial Holding and Dimerco Data System 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.

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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 CEOs Directory module to screen CEOs from public companies around the world.