Correlation Between YuantaP Shares and Fubon Financial
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Fubon 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 YuantaP Shares and Fubon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YuantaP shares Taiwan Top and Fubon Financial Holding, you can compare the effects of market volatilities on YuantaP Shares and Fubon 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 YuantaP Shares with a short position of Fubon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Fubon Financial.
Diversification Opportunities for YuantaP Shares and Fubon Financial
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between YuantaP and Fubon is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Top and Fubon Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fubon Financial Holding and YuantaP Shares 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 YuantaP shares Taiwan Top are associated (or correlated) with Fubon Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fubon Financial Holding has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Fubon Financial go up and down completely randomly.
Pair Corralation between YuantaP Shares and Fubon Financial
Assuming the 90 days trading horizon YuantaP shares Taiwan Top is expected to generate 1.09 times more return on investment than Fubon Financial. However, YuantaP Shares is 1.09 times more volatile than Fubon Financial Holding. It trades about -0.09 of its potential returns per unit of risk. Fubon Financial Holding is currently generating about -0.13 per unit of risk. If you would invest 19,180 in YuantaP shares Taiwan Top on August 31, 2024 and sell it today you would lose (455.00) from holding YuantaP shares Taiwan Top or give up 2.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
YuantaP shares Taiwan Top vs. Fubon Financial Holding
Performance |
| Timeline |
| YuantaP shares Taiwan |
| Fubon Financial Holding |
YuantaP Shares and Fubon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Fubon Financial
The main advantage of trading using opposite YuantaP Shares and Fubon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Fubon 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 Fubon Financial will offset losses from the drop in Fubon Financial's long position.| YuantaP Shares vs. Yuanta Daily Taiwan | YuantaP Shares vs. Cathay Taiwan 5G | YuantaP Shares vs. Yuanta Daily CSI | YuantaP Shares vs. Fubon FTSE Vietnam |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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