Correlation Between Trusval Technology and Cathay Financial
Can any of the company-specific risk be diversified away by investing in both Trusval Technology and Cathay 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 Trusval Technology and Cathay Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trusval Technology Co and Cathay Financial Holding, you can compare the effects of market volatilities on Trusval Technology and Cathay 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 Trusval Technology with a short position of Cathay Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trusval Technology and Cathay Financial.
Diversification Opportunities for Trusval Technology and Cathay Financial
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Trusval and Cathay is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Trusval Technology Co and Cathay Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathay Financial Holding and Trusval Technology 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 Trusval Technology Co are associated (or correlated) with Cathay Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathay Financial Holding has no effect on the direction of Trusval Technology i.e., Trusval Technology and Cathay Financial go up and down completely randomly.
Pair Corralation between Trusval Technology and Cathay Financial
Assuming the 90 days trading horizon Trusval Technology Co is expected to generate 25.35 times more return on investment than Cathay Financial. However, Trusval Technology is 25.35 times more volatile than Cathay Financial Holding. It trades about 0.12 of its potential returns per unit of risk. Cathay Financial Holding is currently generating about 0.11 per unit of risk. If you would invest 18,000 in Trusval Technology Co on December 5, 2024 and sell it today you would earn a total of 2,400 from holding Trusval Technology Co or generate 13.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 97.14% |
Values | Daily Returns |
Trusval Technology Co vs. Cathay Financial Holding
Performance |
Timeline |
Trusval Technology |
Cathay Financial Holding |
Trusval Technology and Cathay Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Trusval Technology and Cathay Financial
The main advantage of trading using opposite Trusval Technology and Cathay Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trusval Technology position performs unexpectedly, Cathay 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 Cathay Financial will offset losses from the drop in Cathay Financial's long position.Trusval Technology vs. Advanced Wireless Semiconductor | Trusval Technology vs. Chernan Metal Industrial | Trusval Technology vs. Dynamic Medical Technologies | Trusval Technology vs. SynCore Biotechnology Co |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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