Correlation Between YuantaP Shares and Fubon Hang
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Fubon Hang 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 Hang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YuantaP shares Taiwan Mid Cap and Fubon Hang Seng, you can compare the effects of market volatilities on YuantaP Shares and Fubon Hang 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 Hang. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Fubon Hang.
Diversification Opportunities for YuantaP Shares and Fubon Hang
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between YuantaP and Fubon is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Mid Cap and Fubon Hang Seng in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fubon Hang Seng 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 Mid Cap are associated (or correlated) with Fubon Hang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fubon Hang Seng has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Fubon Hang go up and down completely randomly.
Pair Corralation between YuantaP Shares and Fubon Hang
Assuming the 90 days trading horizon YuantaP shares Taiwan Mid Cap is expected to generate 0.64 times more return on investment than Fubon Hang. However, YuantaP shares Taiwan Mid Cap is 1.56 times less risky than Fubon Hang. It trades about 0.04 of its potential returns per unit of risk. Fubon Hang Seng is currently generating about -0.02 per unit of risk. If you would invest 6,850 in YuantaP shares Taiwan Mid Cap on August 28, 2024 and sell it today you would earn a total of 1,035 from holding YuantaP shares Taiwan Mid Cap or generate 15.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
YuantaP shares Taiwan Mid Cap vs. Fubon Hang Seng
Performance |
| Timeline |
| YuantaP shares Taiwan |
| Fubon Hang Seng |
YuantaP Shares and Fubon Hang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Fubon Hang
The main advantage of trading using opposite YuantaP Shares and Fubon Hang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Fubon Hang 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 Hang will offset losses from the drop in Fubon Hang's long position.The idea behind YuantaP shares Taiwan Mid Cap and Fubon Hang Seng 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.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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |