Correlation Between Fubon Taiwan and Shieh Yih
Can any of the company-specific risk be diversified away by investing in both Fubon Taiwan and Shieh Yih 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 Shieh Yih 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 Shieh Yih Machinery, you can compare the effects of market volatilities on Fubon Taiwan and Shieh Yih 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 Shieh Yih. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon Taiwan and Shieh Yih.
Diversification Opportunities for Fubon Taiwan and Shieh Yih
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fubon and Shieh is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Fubon Taiwan Technology and Shieh Yih Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shieh Yih Machinery 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 Shieh Yih. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shieh Yih Machinery has no effect on the direction of Fubon Taiwan i.e., Fubon Taiwan and Shieh Yih go up and down completely randomly.
Pair Corralation between Fubon Taiwan and Shieh Yih
Assuming the 90 days trading horizon Fubon Taiwan Technology is expected to generate 0.47 times more return on investment than Shieh Yih. However, Fubon Taiwan Technology is 2.13 times less risky than Shieh Yih. It trades about 0.16 of its potential returns per unit of risk. Shieh Yih Machinery is currently generating about 0.01 per unit of risk. If you would invest 19,330 in Fubon Taiwan Technology on October 9, 2024 and sell it today you would earn a total of 665.00 from holding Fubon Taiwan Technology or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon Taiwan Technology vs. Shieh Yih Machinery
Performance |
| Timeline |
| Fubon Taiwan Technology |
| Shieh Yih Machinery |
Fubon Taiwan and Shieh Yih Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon Taiwan and Shieh Yih
The main advantage of trading using opposite Fubon Taiwan and Shieh Yih positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon Taiwan position performs unexpectedly, Shieh Yih 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 Shieh Yih will offset losses from the drop in Shieh Yih's long position.| Fubon Taiwan vs. Fubon NIFTY | Fubon Taiwan vs. eCloudvalley Digital Technology | Fubon Taiwan vs. Logah Technology Corp | Fubon Taiwan vs. Advanced Wireless Semiconductor |
| Shieh Yih vs. Hota Industrial Mfg | Shieh Yih vs. Sinbon Electronics Co | Shieh Yih vs. Tong Hsing Electronic | Shieh Yih vs. Flexium Interconnect |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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