Correlation Between Fubon Taiwan and Standard Foods
Can any of the company-specific risk be diversified away by investing in both Fubon Taiwan and Standard Foods 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 Fubon Taiwan and Standard Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fubon Taiwan Technology and Standard Foods Corp, you can compare the effects of market volatilities on Fubon Taiwan and Standard Foods 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 Fubon Taiwan with a short position of Standard Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon Taiwan and Standard Foods.
Diversification Opportunities for Fubon Taiwan and Standard Foods
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fubon and Standard is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Fubon Taiwan Technology and Standard Foods Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standard Foods Corp and Fubon Taiwan 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 Fubon Taiwan Technology are associated (or correlated) with Standard Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standard Foods Corp has no effect on the direction of Fubon Taiwan i.e., Fubon Taiwan and Standard Foods go up and down completely randomly.
Pair Corralation between Fubon Taiwan and Standard Foods
Assuming the 90 days trading horizon Fubon Taiwan Technology is expected to under-perform the Standard Foods. In addition to that, Fubon Taiwan is 2.83 times more volatile than Standard Foods Corp. It trades about -0.1 of its total potential returns per unit of risk. Standard Foods Corp is currently generating about -0.01 per unit of volatility. If you would invest 3,770 in Standard Foods Corp on September 12, 2024 and sell it today you would lose (5.00) from holding Standard Foods Corp or give up 0.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon Taiwan Technology vs. Standard Foods Corp
Performance |
| Timeline |
| Fubon Taiwan Technology |
| Standard Foods Corp |
Fubon Taiwan and Standard Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon Taiwan and Standard Foods
The main advantage of trading using opposite Fubon Taiwan and Standard Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon Taiwan position performs unexpectedly, Standard Foods 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 Standard Foods will offset losses from the drop in Standard Foods' long position.| Fubon Taiwan vs. Standard Foods Corp | Fubon Taiwan vs. Dimension Computer Technology | Fubon Taiwan vs. Loop Telecommunication International | Fubon Taiwan vs. Hunya Foods Co |
| Standard Foods vs. Uni President Enterprises Corp | Standard Foods vs. Great Wall Enterprise | Standard Foods vs. Ruentex Development Co | Standard Foods vs. WiseChip Semiconductor |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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