Correlation Between CTBC Financial and Castles Technology
Can any of the company-specific risk be diversified away by investing in both CTBC Financial and Castles Technology 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 Castles Technology 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 Castles Technology Co, you can compare the effects of market volatilities on CTBC Financial and Castles Technology 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 Castles Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTBC Financial and Castles Technology.
Diversification Opportunities for CTBC Financial and Castles Technology
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CTBC and Castles is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding CTBC Financial Holding and Castles Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castles Technology 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 Castles Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castles Technology has no effect on the direction of CTBC Financial i.e., CTBC Financial and Castles Technology go up and down completely randomly.
Pair Corralation between CTBC Financial and Castles Technology
Assuming the 90 days trading horizon CTBC Financial Holding is expected to generate 0.13 times more return on investment than Castles Technology. However, CTBC Financial Holding is 7.74 times less risky than Castles Technology. It trades about 0.06 of its potential returns per unit of risk. Castles Technology Co is currently generating about -0.1 per unit of risk. If you would invest 6,030 in CTBC Financial Holding on September 26, 2024 and sell it today you would earn a total of 160.00 from holding CTBC Financial Holding or generate 2.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CTBC Financial Holding vs. Castles Technology Co
Performance |
Timeline |
CTBC Financial Holding |
Castles Technology |
CTBC Financial and Castles Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CTBC Financial and Castles Technology
The main advantage of trading using opposite CTBC Financial and Castles Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTBC Financial position performs unexpectedly, Castles Technology 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 Castles Technology will offset losses from the drop in Castles Technology's long position.CTBC Financial vs. Formosa Chemicals Fibre | CTBC Financial vs. WinMate Communication INC | CTBC Financial vs. Qualipoly Chemical Corp | CTBC Financial vs. Tai Tung Communication |
Castles Technology vs. Gold Rain Enterprises | Castles Technology vs. Cipherlab Co | Castles Technology vs. Accton Technology Corp | Castles Technology vs. Wah Hong Industrial |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |