Correlation Between Cathay Financial and Genesis Technology
Can any of the company-specific risk be diversified away by investing in both Cathay Financial and Genesis 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 Cathay Financial and Genesis Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cathay Financial Holding and Genesis Technology, you can compare the effects of market volatilities on Cathay Financial and Genesis 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 Cathay Financial with a short position of Genesis Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cathay Financial and Genesis Technology.
Diversification Opportunities for Cathay Financial and Genesis Technology
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cathay and Genesis is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Cathay Financial Holding and Genesis Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesis Technology and Cathay 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 Cathay Financial Holding are associated (or correlated) with Genesis Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesis Technology has no effect on the direction of Cathay Financial i.e., Cathay Financial and Genesis Technology go up and down completely randomly.
Pair Corralation between Cathay Financial and Genesis Technology
Assuming the 90 days trading horizon Cathay Financial Holding is expected to generate 0.3 times more return on investment than Genesis Technology. However, Cathay Financial Holding is 3.31 times less risky than Genesis Technology. It trades about -0.04 of its potential returns per unit of risk. Genesis Technology is currently generating about -0.29 per unit of risk. If you would invest 5,900 in Cathay Financial Holding on August 16, 2024 and sell it today you would lose (10.00) from holding Cathay Financial Holding or give up 0.17% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Cathay Financial Holding vs. Genesis Technology
Performance |
Timeline |
Cathay Financial Holding |
Genesis Technology |
Cathay Financial and Genesis Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cathay Financial and Genesis Technology
The main advantage of trading using opposite Cathay Financial and Genesis Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cathay Financial position performs unexpectedly, Genesis 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 Genesis Technology will offset losses from the drop in Genesis Technology's long position.Cathay Financial vs. Cathay Financial Holding | Cathay Financial vs. Fubon Financial Holding | Cathay Financial vs. Mercuries Life Insurance |
Genesis Technology vs. Wistron Information Technology | Genesis Technology vs. Syscom Computer Engineering | Genesis Technology vs. Jetwell Computer Co | Genesis Technology vs. Ares International Corp |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Money Managers Screen money managers from public funds and ETFs managed around the world |