Correlation Between Materials Analysis and CTBC Financial

Can any of the company-specific risk be diversified away by investing in both Materials Analysis and CTBC Financial 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 Materials Analysis and CTBC Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Materials Analysis Technology and CTBC Financial Holding, you can compare the effects of market volatilities on Materials Analysis and CTBC Financial 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 Materials Analysis with a short position of CTBC Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Materials Analysis and CTBC Financial.

Diversification Opportunities for Materials Analysis and CTBC Financial

-0.71

Correlation Coefficient

Materials Analysis  CTBC Financial

Pay attention - limited upside

The 3 months correlation between Materials and CTBC is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Materials Analysis Technology and CTBC Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTBC Financial Holding and Materials Analysis 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 Materials Analysis Technology are associated (or correlated) with CTBC Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTBC Financial Holding has no effect on the direction of Materials Analysis i.e., Materials Analysis and CTBC Financial go up and down completely randomly.

Pair Corralation between Materials Analysis and CTBC Financial

Assuming the 90 days trading horizon Materials Analysis Technology is expected to under-perform the CTBC Financial. In addition to that, Materials Analysis is 10.91 times more volatile than CTBC Financial Holding. It trades about -0.31 of its total potential returns per unit of risk. CTBC Financial Holding is currently generating about 0.19 per unit of volatility. If you would invest  6,240  in CTBC Financial Holding on December 30, 2024 and sell it today you would earn a total of  120.00  from holding CTBC Financial Holding or generate 1.92% return on investment over 90 days.

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

Materials Analysis Technology  vs.  CTBC Financial Holding

Materials Analysis

Risk-Adjusted Performance

Very Weak

Over the last 90 days Materials Analysis Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

CTBC Financial Holding

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CTBC Financial Holding are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, CTBC Financial is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Materials Analysis and CTBC Financial

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

The idea behind Materials Analysis Technology and CTBC Financial Holding 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..